We have come a lot of ways from the place when the RBI was going to Ban Cryptocurrencies to now that the Cryptocurrency Taxation Bill is being passed in the Indian Parliament. Before I point out all the important parts I just want to say that it's been one hell of a ride from Banking Ban to this. Although technically Crypto is not Legal in India I am happy with what it is right now.
The Finance Bill 2022 passed in Lok Sabha with new crypto tax rules.:
▫️ 30% Flat tax on every profit.
▫️ 1% TDS on every trade/transaction (July Onwards)
▫️ No Deductions.
▫️ No Loss setoff.
These are the main points of the Finance Bill on Cryptocurrency Taxation. First things first the 30% taxation is definitely a lot and many people will say the same on Twitter, but I do feel that we needed a point to start from and 30% seems a good enough point for now. As I am fairly certain there will be several revisions to this Taxation.
Next is the whole controversial 1% TDS on every Trade point and truth be told there hasn't yet been any clarity if this 1% TDS is applicable on all transactions or just when we Cashout our Crypto. So yeah this one's a definite doozy.
Finally, we come to the No Deductions and No Setoff point which in my opinion is both bad as a person can make a profit of 100 USD and later on lose 150 USD but he will still be liable to pay 30 USD as a tax even though he/she ultimately lost Money.
WHAT'S MY OPINION?
If you ask me then I will say yes the rules are definitely a little harsh but as I said before we had to start from somewhere and I am ok with this as of right now. Some people are also saying that these laws might kill the Budding Crypto Ecosystem in India but I have different thoughts on this. I feel like Day Trading won Crypto will definitely take a huge hit but the HODL mechanism might just increase a lot and people start HODLING more and more.
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You gonna find a lot of people Trying to find ways around this as it sounds like really basic laws and those tend to have many loopholes, BUt i do believe this will cause a lot of people to hold these tokens and maybe locking in assessed to not generate profit. BUt who knows how this can be enforced at the best of times