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Industry wants clarity on Crypto Tax Laws in the Union Budget
- The Indian industry association Indiatech has written to the country's finance minister Mrs. N Sitharaman about Crpto Taxation. Coinswitch Kuber, Wazirx, and Coindcx are among the major cryptocurrency exchanges represented by the group.
- Business group requested clarification on crypto taxes in the Union Budget in a letter to the finance minister. A trade group has also called on the government to change existing tax legislation to incorporate crypto assets. Rameesh Kailasam, president and CEO of Indiatech, told Ettech:
- There will be misunderstanding Otherwise. The budget should ideally establish unambiguous guidelines on direct taxation, and the GST Council should specify the applicability of taxation.
- The DGGI raided major cryptocurrency exchanges lately and found "massive" GST avoidance. According to reports, the raid unearthed tax evasion totaling Rs 70 crore ($9.4 million). The failure to pay taxes properly has been attributed to a lack of understanding of tax regulations, according to crypto exchanges.
- Finance Minister Nirmala Sitharaman has been urged by Indiatech to recognise cryptocurrencies as digital assets rather than money. The industry group has also proposed imposing a flat 18 percent GST on exchange commissions exclusively.
- There is currently no law in India that governs crypto assets directly. The Indian government is apparently rewriting a cryptocurrency bill that was scheduled to be addressed during the winter session of parliament but was not taken up.
- Some bitcoin exchanges have been accused of avoiding paying the goods and services tax (GST) (GST). Several crypto businesses are being investigated by India's Directorate General of Goods and Services Tax Intelligence (DGGI) for tax evasion.
- According to ET, are under increased regulatory scrutiny Certain business strategies used by crypto selling platforms. Platforms like Unocoin and CoinSwitch Kuber, for example, function as a broker or aggregator, buying and selling cryptocurrencies for customers and profiting from the trades.
- IndiaTech recommends levying a flat 18 percent GST on exchange platform commissions (brokerage or exchange fees per trade) rather than the total amount, as is the case with e-commerce transactions.
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Other suggestions include a requirement for people holding crypto assets to disclose their holdings at the end of the financial year, comparable to the Ministry of Corporate Affairs' disclosure rules for organisations holding crypto assets. Making Know Your Customer (KYC) requirements mandatory is also a good idea.
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IndiaTech has proposed Indian ownership requirements for crypto exchanges, as well as offering authorised dealers status to exchanges importing crypto.
- the industry group has advocated enabling legislation to recognise In terms of direct taxation and treat it as income from capital gains or gains from business and profession, depending on the type of business conducted by the holder and the timeliness and form of the holding.
- Business group written a letter to India's finance minister is requesting clarification on cryptocurrency taxation in the Union Budget 2022-23. "Ideally, the budget should establish consistent direct taxing laws, and the GSTN should detail the taxation's applicability on Taxation applicability on Crypto otherwise there will be misunderstanding.
Other Highlights of Union Budget 2022-23 :
General
1. Paperless Budget. Presented on Tab by the FM.
2. Economic Growth to be 9.2% for FY 2022-23.
3. Railways to develop projects for MSME small businesses.
4. ECLGS Scheme extended till March 2023.
5. E-Passports will be rolled out in FY 2022-23.
6. Battery swapping policy will be implemented.
7. SEZ will be replaced with new legislation.
8. RBI to issue digital Rupee in FY 2022-23.
Direct Tax Proposal:
- New updated returns within 2 years after Assessment Year with additional tax
- MAT reduced for cooperatives @ 15% from current 18.5%
- Surcharge on Copratives reduced to 7.5% between 1 cr to 10 cr
- Higher deduction for differently abled deduction
- NPS deduction for state govt employees upto 14% from 10%
- Start up tax incentives extended to 1 more year
- Newly incorporated manufacturing unit @ 15% extension of manufacturing date by 1 year
- scheme for taxation of virtual digital assets @ 30%, no deduction only cost of acquisition, no set off, tds proposed@1%, gift also taxed
- litigation management no multi year appeal on same question of law
- rationalizations of charges in case of consortium finanace
- long term capital gains surcharge capped @ 15% for all assets.
- any cess on income is not allowable exp.
- No set off of losses will be allowed against any income found during search
