Crypto NFT Daily News

India Bans Crypto Loss Offset

The Minister of State Finance declared on Monday that India Bans Crypto Loss Offset of crypto against the gains of another. The same applies to every Virtual Digital asset, whose definition is yet to be determined officially.

India Bans Crypto Loss Offset

Mr. Pankaj Chaudhary in his written response to Lok Sabha stated the government shall soon state definitions for VDA or Virtual Digital Assets, to levy 30% tax on the income acquired by sale or transfer of such assets.

The 2022-23 Budget Harms Crypto growth?

Starting from April 1st, 2022 the Indians shall have to bear paying 30% Income Tax plus cess and surcharges on crypto. It is treated similarly to winnings from horse racing and other speculative earning sources.

India Bans Crypto

India Bans Crypto Infrastructure Costs as Acquisition Cost

While the Finance Bill will define VDA and which assets fall under it, with respect to how they will be considered along with their provisions, The Minister added that the infrastructure cost spent in mining VDA shall not be considered as Acquisition Cost. Therefore, it will be treated as capital expenditure which is not viewed as a deduction from Income Tax.

National Crypto Leaders Unhappy with Crypto Rules

Several notable personalities from the crypto sector in India have expressed their views on India Bans Crypto Loss Offset and other crypto norms.

Nangia Andersen LLP Partner Sandeep Jhunjhunwala says a lack of intra-head adjustment of losses would become sunk costs for investors. Such norms may effectively make investors’ taxes double by paying on gains and no offset of losses.

India Bans Crypto

Yet, Rohinton Sidhwa, Partner, Deloitte India doesn’t share the same view when it comes to mining expense disallowance. Instead, he affirms that prevention of offset between different cryptos will probably impact the traders negatively.

Meanwhile, Ashish Singhal, Co-founder, and CEO, CoinSwitch expresses that such norms will make taxation ineffective as it will drive users to drive away users to the underground peer-to-peer grey market and away from KYC-compliant exchanges and platforms.

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