WazirX CEO Believes Tax Relief on Crypto Transactions in India Is Years Away
The CEO of WazirX, Nischal Shetty, has expressed his belief that tax relief on cryptocurrency transactions in India is unlikely to happen anytime soon. According to Shetty, the 1% tax deduction at source (TDS) on each crypto transaction will remain in place for at least another two years. He stated that there have been no formal discussions between the industry and lawmakers regarding a reduction in TDS. Meanwhile, Sumit Gupta, the CEO of CoinDCX, claims to be engaged in talks with the government to lower TDS from 1% to 0.01%. However, no specific timeline has been provided.
India’s Tax Measures and Their Impact
In April 2022, India implemented a new rule that imposes a 30% tax on digital currency holdings and transfers. The legislation prohibits traders from offsetting losses against profits. Additionally, the Indian government introduced a 1% tax deduction at source for every buy or sell trade in order to monitor the movement of crypto funds. These measures, particularly the TDS, have significantly affected trading volumes and forced Indian crypto exchanges into survival mode. WazirX and CoinDCX have both downsized their workforces due to the prolonged bear market and changing tax policies.
Call for Global Regulatory Framework
In early September 2023, India’s finance minister, Nirmala Sitharaman, called for a global regulatory framework to address issues related to crypto assets. This statement came after the G20 Presidency Note emphasized the roles of the Financial Stability Board (FSB) and the International Monetary Fund (IMF) in safeguarding investors in the crypto ecosystem.
Hot Take: Uncertainty Surrounding Crypto Taxation in India Persists
The CEO of WazirX, Nischal Shetty, predicts that relief from taxes on crypto transactions in India is unlikely to happen soon. The 1% tax deduction at source (TDS) is expected to remain in place for at least another two years. Although CoinDCX CEO Sumit Gupta claims to be in discussions with the government to reduce TDS to 0.01%, no timeline has been provided. The tax measures imposed by the Indian government, including the 30% tax on digital currency holdings and transfers, as well as the 1% TDS, have had a significant impact on trading volumes and forced crypto exchanges into survival mode. India’s finance minister has called for a global regulatory framework to address crypto-related issues, highlighting the importance of organizations like the Financial Stability Board and the International Monetary Fund.
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