According to a junior finance minister, India has tightened crypto regulations by prohibiting losses in one digital asset from being offset against income from another form of a crypto holding.
Minister of State for Finance Pankaj Chaudhary told legislators in parliament that the government will not enable tax discounts on infrastructure costs spent while mining crypto assets since they will not be recognised as cost of acquisition.
The minister’s clarification is a further setback for an industry that was hit with a high tax rate in last month’s budget. Despite rising trade volumes, India’s central bank and government remain suspicious of the industry, fearing that digital currencies might be used for money laundering, terrorist financing, and price instability.
“Treating each market pair’s earnings and losses individually will discourage crypto participation and stifle the industry’s growth.” It’s a pity, and we urge the authorities to rethink,” says Nishcal Shetty, co-founder and CEO of WazirX, which is owned by Binance.
In India, the crypto asset tax regime will be phased in over the course of the fiscal year, beginning April 1. Provisions relating to the 30% tax will take effect at the start of the fiscal year, while those relating to the 1% TDS will take effect on July 1, 2022.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
