Crypto Tax Clarification, "Detrimental For India's Crypto Industry" And Millions Of Investors
Crypto tax clarification, "detrimental for India's crypto industry"
The government's clarification of disallowing losses incurred in a particular digital asset to be set off against income from another version of a crypto holding is "detrimental for India's crypto industry and the millions who have invested in this emerging asset class," said Ashish Singhal, Co-founder and CEO of CoinSwitch, one of India's top crypto exchange.
The government won't allow tax breaks on infrastructure costs incurred. At the same time, mining of crypto assets won't be treated as a cost of acquisition, Minister of State for Finance Pankaj Chaudhary told lawmakers in parliament on Monday.
The clarification by the minister is a further setback to an industry that was slapped with a steep tax rate of 30 per cent on gains from digital assets' transactions in the budget unveiled last month.
The Reserve Bank of India and the government are sceptical about the sector despite a rise in trading volumes as it fears digital currencies can be used for money laundering, terrorist financing and price volatility.
"This is detrimental for India's crypto industry and the millions invested in this emerging asset class. We fear the lack of provision to offset losses will drive away users from KYC-compliant exchanges and platforms to the underground peer-to-peer grey market, which would defeat the purpose of the tax," said Mr Singhal.The budget recognised virtual digital assets (VDAs) as an emerging asset class. Therefore, a natural course of action would have been progressively bringing the regulations at par with other asset classes. Instead, today, we have taken a step backwards with this clarification. If a regressive provision such as this had been applicable
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