BENGALURU: The Centre is gearing up to publish a new set of guidelines for virtual digital assets (VDAs) by July 1, 2022, CoinSwitch Kuber tweeted on Monday. Last week, Economic Affairs Secretary Ajay Seth said the government will finalise a consultation paper on cryptocurrencies with inputs from institutions and various stakeholders soon.
It is expected that these guidelines will be out by July 1, 2022, the same day 1% TDS (tax deducted at source) on all crypto trading transactions will come into effect. When asked about the new guidelines and expectations, many crypto exchanges said the government may not cut the 1% TDS. “Looking at the current stance taken by the government, 1% TDS may remain for at least this fiscal and revising guidelines is critical to ensure entrepreneurial innovation for Web 3.0 thrives in India,” said Khaleelulla Baig, co-founder and CEO, Koinbasket.
Sathvik Vishwanath, co-founder and CEO of Unocoin too said that the TDS might remain at 1% and that it looks like the government is not favourable for day traders. “In a year or two, when the government has enough data, they might be able to revise the TDS,” he said.
Currently, investors pay a 30% tax on income from cryptocurrencies and other virtual digital assets. According to Vikram Subburaj, CEO of Giottus crypto platform, in India, over 20 million people have parked their funds in crypto assets. He said as an industry, they expect the government to arrive at a more rational value to this TDS, and that regular reviews and revisions of the rules are necessary to move with the times. CoinSwitch, which tweeted about the new guidelines, said the industry has not yet received the clarifications it had sought on the implementation of tax proposals, and this ambiguity may result in operational obstacles.
“It is the need of the hour that the government issues these clarifications before the TDS comes into effect on July 1,” Ashish Singhal, co-founder and CEO, CoinSwitch said. He added that despite the finance bill, the crypto industry sees space for reasonable changes in tax policy.
Crypto players await response on tax
Bengaluru: CoinSwitch, which tweeted about the new guidelines, said the industry has not yet received the clarifications it had sought on the implementation of tax proposals, and this ambiguity may result in operational obstacles.