SUMMARY
BWA has already submitted a draft of concerns and recommendations to the finance ministry and will also hold consultations with CBDT officials
In a to be held meeting next week, BWA will also talk about the provisions that disallow investors to carry forward the crypto and other VDA losses
The crypto industry representatives also want the government to bring down the TDS to 0.1%
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Web3 industry body Bharat Web3 Association will be holding a meeting with the finance ministry to talk about high taxes on crypto currencies. The industry body, which constitutes Coinbase, CoinDCX, CoinSwtich Kuber and Polygon, among others as its founding members, will also be discussing the regulatory uncertainty within the ecosystem.
It has already submitted a draft of concerns and recommendations to the finance ministry and will also hold consultations with officials of the Central Board of Direct Taxes (CBDT). The consultation will be done in hopes to seek relief from the stringent crypto tax regime during the Budget 2023-2024 announcements.
According to a Business Standard report, the Bharat Web3 Association will likely highlight the impact of the existing taxes such as TDS and the tax on income from crypto and virtual digital assets (VDAs). It will also talk about the provisions that disallow investors to carry forward the loss and share inputs on suitable amendments.
Currently, the Indian government imposes a 30% capital gains tax and a 1% transaction TDS on VDAs. Furthermore, any loss incurred during the transfer of the virtual asset would not be allowed to be set off against any income calculated under the ‘other’ provision of the income tax law, the finance ministry had proposed during the budget for 2022-23.
It also clarified that profits made on crypto transactions (including those on the transfer of VDAs – capital asset or not) will not be allowed to be carried forward and offset against losses.
VDAs are subsets of all digital assets transacted on a blockchain, such as non-fungible tokens (NFTs), cryptos and other virtual assets. According to the Bharat Web3 Association, the provision that disallows offsetting has hurt the Indian Web3 industry and trading volumes have fallen down to 90%.
Alongside the push for stringent regulations, the crypto industry representatives want the government to bring down the TDS to 0.1%.
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