Government of India: Introduce Reasonable Crypto Tax Policies

Government of India: Introduce Reasonable Crypto Tax Policies

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Aditya Singh started this petition to Prime Minister Narendra Modi and

India has about 15-20 million crypto Investors and several lakhs of young Indians (with an average age of 17-27 years) who are part of the Industry and are actively engaged in the development and deployment of various services in crypto. The total assets held by Indian crypto investors are pegged at about $5-6 Billion (Source: Reuters). Most of these are held by small investors with the intention to diversify their portfolios and have been disclosing their gains honestly and paying the applicable tax.

Crypto Industry also contributes significantly to the country in the form of providing Employment, Bringing in FDI Investments, GST payments, and Income tax revenues to the government. This is acknowledged by the fact that cumulative average daily trading volume on Indian exchanges ranges about $100-200 million (Rs.750 Cr- Rs.1500 Cr) and at an average cost of 0.2% as brokerage charged by exchanges on each buy and sell transactions, results in GST tax collection of about Rs.50-Rs.100 Lakhs on a daily basis. In addition to this, the Indian crypto ecosystem has also obtained about $638 million worth of Funding from International investors in 2021 (Source: Economic Times).

Crypto Industry has been actively seeking regulations and has extended its complete support to the Government to ensure transparency in activities and also supported the authorities in their Investigations. The Proposals put forth by the Honorable Finance Minister in Budget 2022 placed crypto at the same footing against social evils like Betting and gambling. This can have a devastating impact not only on the Industry per se but the economy as a whole.

Hence, In the best interest of our country, Investors, and the industry as a whole, we urge you to reconsider the following budget proposals. The Industry wants to help the Government bring out regulations and also establish India as the global hub for crypto which aligns with our vision of achieving a $5 Trillion economy.

1. Crypto Industry should not be treated at the same footing as those of the betting and gambling industry. Crypto not only includes speculation on assets by traders per se but also encompasses and explores various use cases of the underlying technology.

2. Current proposed tax rate at 30% under section 115BBH to be brought in line with section 111A and Section 112A i.e. Tax rate as applicable to stock market transactions.

3. TDS at 1% on Sale consideration under section 194S to be reduced to 0.05% or Alternatively, SFT be implemented for Crypto exchanges at the same footing as Stock exchanges.

4. Cost of Acquisition should be defined to include Exchange fees, Blockchain network fees, Interest payment, Royalty payments on NFTs etc.

5. Loss set-off and carry-forward should be allowed since crypto markets are in their initial stages and are highly volatile.

Honorable Finance Minister,

We urge you to kindly consider these requests from the Industry. Since, the proposals in their current form, have a devastating impact not only on Crypto traders but Crypto Industry as a whole.

Thank you
Indian Crypto Community

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