The crypto industry has urged the government to reduce the TDS on payments towards gains arising from trading in cryptocurrencies to 0.01 or 0.05 per cent, from the proposed 1 per cent, saying it will hurt retail traders.
CoinDCX CEO and Co-Founder Sumit Gupta said 30 per cent tax on income from cryptocurrencies is on the higher side and should be reduced.
”At the industry (level), we are engaging with the government and have submitted a presentation on how 30 per cent tax and more than that, 1 per cent TDS is detrimental to the growth of the industry. It will lock up capital for traders and suck liquidity from market. If liquidity is not there, retail investors will suffer,” Gupta told reporters.
Meanwhile, he said CoinDCX is also engaging with the traders on its platform to comply with the new tax noms.
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”We will try to make it simple at our end but we still continue to engage and keep the dialogue open with the government asking them to bring down TDS (tax deducted at source) to 0.01 or 0.05 per cent. Income Tax of 30 per cent is also on the higher side, which we are requesting them to bring down,” Gupta said.
The 2022-23 Budget has brought in clarity with regard to levy of income tax on crypto assets.
From April 1, a 30 per cent income tax plus cess and surcharges will be levied on such transactions as done in the case of winnings from horse races or other speculative transactions.
The Budget 2022-23 also proposed 1 per cent TDS on payments towards virtual currencies beyond Rs 10,000 in a year and taxation of such gifts in the hands of the recipient. The threshold limit for TDS would be Rs 50,000 a year for specified persons, which include individuals/HUFs who are required to get their accounts audited under the I-T Act.
The provisions related to 1 per cent TDS will come into effect from July 1, 2022, while the gains will be taxed effective April 1.