Commuters walk past the building of India's Ministry of Finance during dusk in New Delhi, India. Image: Adnan Abidi/ Reuters
Bharat Web3 Association (BWA), a well-known Indian crypto advocacy group, has submitted a draft to the Finance Ministry of India voicing its concerns and recommendations regarding the high taxes and regulatory uncertainty when it comes to crypto assets in India.
BWA has asked the ministry to provide suitable tax relief in the upcoming budget along with a change in the policy that does not allow the offsetting of losses against profits and a change in the 1 percent TDS policy.
BWA was formed last month after BACC was dissolved by IAMAI in July, with most of the members of BACC such as WazirX, Coinbase, CoinSwitch Kuber, CoinDCX, and Polygon, among others, joining BWA.
The Finance Ministry is holding consultations with various industry bodies in India before the upcoming budget for 2023-24 in February. In the 2022-23 budget, the Finance Ministry introduced a 30 per cent capital gains tax and a 1 percent transaction tax deduction at source (TDS). The ministry added that profits made on crypto transactions could not be carried forward and offset against losses.
The crypto advocacy group members are expected to meet officials from the Finance Ministry next week. The group has pointed out that unfriendly and strict tax policies are hurting the growth of crypto assets in India, and a reform is necessary.
The representatives of the crypto industry have been asking to bring the TDS rate down to 0.1 per cent. This is because even though TDS returns can be claimed, having their capital locked is not very profitable for traders.
â€śThe BWA aims to highlight the impact of the existing tax provisions such as TDS, tax on income from VDAs, and not allowing carrying forward of losses on the wider industry and share its inputs on suitable amendments which can help address the concerns of the government and at the same time allow growth of this sector,â€ť a member of the BWA told Business Standard.
The Indian crypto industry went through a 90 percent fall in trading volume, largely owing to these harsh rules and regulations.
In view of the FTX crisis, BWA has also recommended the Finance Ministry to propose a set of strong regulations for the crypto sector. BWA said that it is in constant touch with the government to make sure that a strong regulatory and compliance framework is put in place.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash