Crypto investors take to Twitter to protest high tax rates, #reducecryptotax top trending

Photo by Olya Kobruseva from Pexels

For the past two days, Twitter has been trending "#reducecryptotax" to protest the tax laws brought on crypto trading on February 1st in Budget 2022. 

India's Finance Minister Nirmala Sitharaman made three crucial points regarding cryptocurrencies while declaring the Budget: 

• A fixed no slab tax of 30% on any profits generated from trading of any cryptocurrencies or NFTs from April 1st, irrespective of the holding period. 
• 1% Tax Deducted at Source (TDS) on buying any digital currency or NFTs. 
• Introduction of a new Central Bank Digital Currency for India called Digital Rupee. 

Twitter users have argued that it is unfair to tax almost 1/3rd of any profits gained without slabs. Moreover, they are no compensations offered in case the investors undergo losses. 

The high taxation rates have portrayed the profits on digital investment as equivalent to gambling or horse racing instead of a standard investment asset. 

Sitharaman, in her speech for Budget 2022, mentioned that taxation does not grant legitimacy to cryptocurrency. This makes the tax only a form of revenue generator for the government without any benefits to the investors. 

Twitter has been flooded with demands for 0% TDS. On the one hand, the TDS enables the government to track the money going into virtual currency investments, and the drawbacks are far more significant. 

Nimesh Sanghvi, the founder of Coin Crunch India, told Business Standard, "(The TDS law) raises the question what do you do while exchanging on international platforms or when the seller is not an Indian resident?". 

He states that the TDS will erode the capital for market makers and traders, leading to the volume of investment dying down and hence killing the competitiveness with international markets. 

The strict taxation by the government implies its unwillingness towards the rise in crypto investments. People can notice similar trends in the USA, where taxes are levied to discourage the trading of virtual currencies and NFTs. 

When you realise crypto is legalised in India but with 30% tax#Cryptoindia #CryptoTax #Budget2022 pic.twitter.com/DDZhp0oRrJ

— Aayushi Rathi ! (@AayushiRathi18) February 2, 2022

In contrast, Thailand had to draw back from the 15% tax it would imply on capital gains of crypto trading due to solid public pushback. As a result, it gives hope to the Indian investors to put out their voices and desire an outcome that would match their needs. 

Author 

Archan Kundu