The Indian government has scheduled a panel meeting with its ministers to discuss tax rates within the country, with a potential 28% increase as reported by Bloomberg. The meeting is slated for next week Tuesday and Wednesday.
Indian Crypto Income Tax Already Sits At 30%
Back in February, a 30% crypto income tax was officially introduced and implemented in India. The country’s finance minister had expected the move to work in favor of the country’s quest for effective crypto regulations. A few months later, there was a sharp change.
In reaction to the law, there was a 30% fall in the trading activities within the country with Coinbase, one of the world’s leading exchange platforms threatening to close all forms of business activities within the country.
Despite everything, a claim was made by the country’s former finance minister that crypto was gambling and he suggested tax rates go as high as 40% or 50% if crypto activities were to be discouraged by the Indian government.
Last month, a proposal by India’s Goods and Services Tax Council (GST) was made, to increase the tax rate to 28%. Though final resolutions might not be made, the discussions are scheduled for next week.
Losses From Crypto Transfer Cannot Be Set Off Against Any Other Income
As explained by Advocate Ishan Kapoor, an Indian Special Counsel in India, crypto taxes are non-transferable between two classes of crypto. According to him, income made on a particular class of asset must be taxed and no asset can be used to pay off the taxes of another.
Cryptocurrencies have journeyed from being termed as speculative products to being recognized as virtual digital assets and on April 1, a law to levy taxes on such assets was passed in India. The current Indian Crypto tax rate is 30%.
While the doors are opened to crypto activities in some Asian and Middle East regions, especially South Korea and Abu Dhabi, the case is different in India, which has proven to be a crypto-aversive state. The Indian government is working hard to regulate crypto activities.
The 30% crypto tax doesn’t only affect cryptocurrencies but also extends to other virtual assets, such as NFTs. According to the law, traders are not allowed to set off income made in the transfer of virtual digital assets within the country.