India’s Finance Bill 2022 containing theproposed 30% tax on crypto income is now being considered in Rajya Sabha, theupper house of India’s parliament.
Parliament member Sushil Kumar Modi askedthe government Monday to increase the tax on cryptocurrency income from thecurrent rate of 30%. He said:
I would like to request the finance ministerthat the 30% tax that you have imposed on crypto, please consider in the comingdays if this tax can be further increased.
Parliament member Modi argued thatcryptocurrency is not a commodity, an asset, goods, or a service, emphasizingthat it does not have intrinsic value.
He added that while stocks are backed bycompanies behind them, “crypto is not under government jurisdiction.” He furtherquestioned, “the decentralized nature of crypto.”
The parliament member further pointed outthat the 18% goods and services tax (GST) is only levied on cryptoservice providers, such as exchanges, emphasizing that this needs to beincreased. Modi opined:
Cryptos are similar to backbone functionsbehind the currency being overlooked by government. In all these activities, 28%tax (GST) is imposed on the total transaction value …So, I request to you that the GST council needs to consider imposing GST on thetotal transaction value of crypto.
Modi proceeded to give examples of countriesthat have imposed higher taxes on crypto. He said Japan has imposed a 55% taxwhile Germany, France, and Australia have imposed up to 45%.
Besides the 30% tax on crypto income, IndianFinance Minister Nirmala Sitharaman also proposed imposing a 1%tax deducted at source (TDS) on every cryptotransaction. The 1% TDS will go into effect on July 1 while the 30% income taxwill start levying on April 1. An Indian parliament memberhas warned that imposing a 1% TDS on every crypto transaction willkill the nascent asset class.
