India’s ministry of finance has dealt another blow to crypto fans with the announcement that individuals will not be permitted to offset a loss on one asset against profit from another.
India has been tightening its grip on crypto users with its latest set of rules and is considering a central bank digital currency (CBDC) as an alternative.
Furthermore, Minister of State Pankaj Chaudhary told regulators that tax relief, which is used to reduce the tax liability on “infrastructure cost incurred while mining of crypto assets as it won’t be treated as a cost of acquisition,” Bloomberg reported.
“Treating profits and losses of each market pair separately will discourage crypto participation and throttle the industry’s growth. It’s very unfortunate, and we urge the government to reconsider this,” said Nischal Shetty, CEO and co-founder of the WazirX crypto exchange.
India tax hikes incoming
India is proposing a 30% tax on profits from digital assets. J.B. Mohapatra, chairman of the Central Board of Direct Taxes (CBDT) said the proposal has already been accepted by the government and will be implemented on April 1.
“Today’s income tax collection is expected to rise further till March 30. Our gross and net collections in the last five years and the history of the tax department are optimal,” said Mohapatra.
The government also wants to impose a 1% tax deducted at source (TDS) on crypto-assets starting on July 1. The crypto community, however, has asked Finance Minister Nirmala Sitharman to reconsider the plan and make it 0.01%.
The Indian government also wants to bring crypto-asset taxes under the same roof as goods and services tax (GST).
The Reserve Bank of India (RBI), however, is considering issuing a CBDC.
“In this day and age, bulk payments between countries, large transactions between institutions, large transactions between central banks of each country are all better enabled with a digital currency. Therefore we think the RBI would be looking to see how best they can come out with it,” said Sitharman.
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