India’s Proposed Crypto Tax Rules Likely to Become Law Thursday

Indias Finance Bill, the legislation that includes proposed rules on crypto taxation, is scheduled to bepassed in parliament Thursday evening.

Any easing of the government's stance will be contained in amendments to the bill, which will be introduced to the lower house and followed by voting on each of the amendments, according to people familiar with parliamentary proceedings.

Indias lower house of parliament is set to consider a tax law on cryptocurrency proposed by Finance Minister Nirmala Sitharaman on March 24, according to a report.

The minister will present the appropriation and finance bills for this year to the lower house of parliament (called Lok Sabha) on March 24. The bill amends Indias income tax laws and identifies virtual digital assets (crypto inclusive) and NFTs as taxable investments.

Sitharaman first announced the proposed law last month. The draft is proposing a 30 percent tax on digital asset transactions. There is a likelihood that traders will pay 30 percent tax on gains from crypto when it comes to this tax calculation. However, there will not be account for losses if the price declines.

The law may be effective from April 1 and numerous experts have condemned the proposal. However, it seems the proposal is a replacement for a proposed bill aimed at banning private crypto in the country.

India is yet to come up with a solid regulatory framework for digital assets after a decision by the Supreme Court to stop Indias Reserve Bank from banning digital assets two years ago.

Since the announcement, efforts to reduce the taxes in the form of a change.org petition, an online campaign like #reducecryptotax, and meetings between industry and government have taken place.

Reports have indicated the government has also been working on classifying crypto under the indirect tax lawof GST (Goods and Services). The government may want to increase the current 18% tax on services provided by crypto exchanges to 28%, in line with gambling and horse racing. It is unclear whether this will feature in the Finance Bill.

Still, as CoinDesk has reported, the industry has little hope the government will change its crypto-taxation stance, and is, therefore, discussing a Supreme Court challenge to stave off the impending tax legislation.