The crypto sector has lobbied the government to decrease the TDS on payments for earnings from cryptocurrency trading to 0.01 or 0.05 percent, rather than the planned 1%, claiming that it will harm regular traders.
Sumit Gupta, CEO and Co-Founder of CoinDCX, believes that a 30% tax on cryptocurrency revenue is excessive and should be decreased.
At the industry (level), they are interacting with the government and have filed a presentation on how 30% tax and more than that, 1% TDS is damaging to the sector’s growth. It will drain liquidity from the market and lock up funds for traders. Retail investors would suffer if liquidity is not available, according to Gupta.
Meanwhile, he stated that CoinDCX is working with traders on its platform to comply with new tax rules.
The 2022-23 Budget clarified the imposition of income tax on crypto assets.
From April 1, a 30% income tax plus cess and surcharges will be charged on such transactions as horse racing wins or other speculative trades.
The Budget 2022-23 also suggested a 1% TDS on virtual currency transfers exceeding $10,000 per year, as well as taxes on such presents in the hands of the receiver. The TDS threshold limit would be Rs 50,000 per year for selected persons, which would include individuals/HUFs who are obliged to have their accounts audited under the I-T Act.
The laws relating to 1% TDS will take effect on July 1, 2022, whereas the profits will be taxed on April 1.