The outcry from crypto traders and investors went unheard after Indian finance minister Nirmala Sitharaman fail to revise the controversial 1% TDS collection on each crypto transaction. In the last 9 months, this TDS collection has said to have fetch over $19 million (approx. Rs. 157 crore) to the government treasury.
The detail was disclose to the Parliament recently by Pankaj Chaudhary, who is the Minister of State for Finance in the country.
The data tracks ten months since the TDS law went live last July in India.
Pankaj Chaudhary Said :
“Direct tax collected by way of tax deducted at source under section 1945 of the Income-tax Act, 1961, on payments made upon transfer of Virtual Digital Assets, aggregates to Rs. 157.9 crore upto 20/03/2023 for FY 2022-23,”.
Indians, In June, began to see one percent tax deductions on each crypto transaction.
This means that 1% TDS is being levied on every step around the purchase, trade, and deposit of crypto assets.
Not just on cryptocurrencies, this 1% TDS is also be charge on the transactions of other VDAs as well, such as non-fungible tokens (NFTs) and other metaverse elements.
Between June and November 2022, the TDS collection from crypto transactions reportedly amount to $7.4 million (approx. Rs. 60 crore), Pankaj Chaudhary had inform at the time.
In the last 5 months, this amount has spike by $11.6 million (approx. Rs. 95 crore), indicating a rise in crypto transactions in India.
Time and again, members of India’s crypto community have urge the finance ministry to revisit the 1% TDS and consider reducing it to promote the growth of the overall crypto sector.
The government of India believes that by imposing 1% tax deduct at source (TDS) on each crypto transaction, it would be easier to keep a track of them despite the element of anonymity that crypto transactions entail.
The crypto community in India is set to surpass the US, UK, Russia, and Japan in terms of adoption this year.
As per a recent report by Statista, India’s crypto community is expect to envelop over 156 million users by the end of 2023.
After the expansion of the sector, the government of India, via its tax laws around crypto, is looking to curb any potential abuse of digital assets for illegal activities like money laundering and terror financing.
