Member of Parliament Sushil Kumar Modi, from India’s ruling party, has once again suggested increasing the tax slab on digital assets.
In a recent interview with Forkast, the MP commented that crypto gains in the country should be taxed at 50%, instead of the current 30%.
An attempt to “discourage” investors
Kumar Modi has been supporting a higher tax rate for digital assets since Finance Minister Nirmala Sitharaman presented the Union Budget 2022-23 on February 1. He had argued that a higher taxation regime will “dissuade” investors from jumping into the “speculative” asset class. This time as well, he stated, “Nobody knows what is this crypto. That’s why we need to discourage and disincentivize” these investments.
With that, the parliamentarian went on to compare crypto with high-risk verticals like gambling, lottery, casino, and horse racing. An association that has also left the larger industry divided. Crypto investor and commentator Aditya Singh had also floated a petition in March asking the same question.
Having said that, MP Sushil Kumar Modi is also of the view that 18% goods and services tax (GST) should be extended to crypto service providers in addition to the direct tax bracket.
Message to new Investors: cash out
Meanwhile, India continues to be a top crypto market. As per a recent report by Gemini, India stands third in the most first-time crypto investors, with 54% of Indians getting started in 2021. But, MP Sushil Kumar Modi makes it clear what lies ahead for these investors. “The government wants to make life hell for those people who are investing in cryptos. That is the bottom line. That is the main thrust of the entire tax.”
With that, Kumar Modi is pushing Indians to cash out their crypto investments. He told the media outlet, “We have given time to younger people who want to exit.” The rest of the holders will face higher taxes liability “because it is like gambling,”
In addition, domestic crypto exchanges are also reporting that the trading volume has taken a hit since the new tax regime has kicked in. And despite a new taxation regime in place, Income Tax Return (ITR) forms in India have reportedly not included additional schedules for crypto disclosure this time for the AY 2022-2023. With this, regulatory uncertainty continues in the Asian country.
Be[In]Crypto also reached out to Rajat Mittal, tax counselor with the Supreme Court of India, to understand if a crypto bill can be expected anytime soon. In his opinion, a bill is unlikely to be tabled “in the foreseeable future.”
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