Indian crypto exchange representatives met with the regulators and demanded a reconsideration of the tax rules after the country announced the new rules during a budget speech at the beginning of February so let’s read furhter in today’s latest cryptocurrency news.
The Indian crypto exchange representatives met with senior policymakers at the finance ministry in a bid to make them reconsider various aspects of the next crypto taxation policy. The meeting was the first interaction between the industry and the policymakers since the finance minister announced the new taxation policies during the national budget speech at the start of February.
Economic Times reported that the meeting was held at the end of the week but reports show that the meetings were held on multiple days throughout the week as representatives from one exchange held an unofficial consultation with the senior finance ministry official according to a source who was present at the meeting. The senior leadership of the crypto exchanges demanded a review of the 1% tax deduction at Source on all transactions saying that it is not feasible and hard to comply with. So now the finance ministry officials are assessing the concerns of its legitimacy.
Exchanges are framing a formal and detailed proposal with the help of the industry body Blockchain and Crypto Assets Council as well as the big four auditing firms led by EY. BACC is a part of the Internet and Mobile Association of India and has been leading consultations with the government on behalf of the exchanges in the industry. The framework is being created to convince the governemnt to exclude the 1% tax deduction clause from the finance bill:
“The Finance Ministry is open to talks and has asked for a formal proposal.”
The crypto industry was in a huddle and therefore held a meeting to discuss the taxation issue. The takeaway was that TDS could discourage the smaller traders and could move them towards informal peer-to-peer trading and decentralized exchanges but some experts and tax officials are divided on whether the government would reconsider removing the rule as it goes forward. Anoush Bhasin who is the founder of New Delhi-based crypto tax videos noted:
“The government has introduced a removal of difficulties clause and this enables the department to be able to change the law.
“So, we will have to wait for parliamentary proceedings and discussions to see whether the government will reconsider. If not, the trading industry will be severely impacted. An alternate mechanism to collect transactional data must be explored with marketplaces/exchanges. The 1% TDS provision poses practical difficulties in implementation and an onerous compliance burden. It could severely dent investing and trading activity in India.”