India Introduces 30% Taxation on Cryptocurrency Income

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India’s revised tax regulation went into effect on Friday after the India Finance Bill 2022 received the green light from parliament. That said, all crypto incomes in the country are liable to a 30% tax with no allowance for deductions or loss offsets. This means that losses on crypto trades would not be offset by gains.

Cryptocurrency Trading Volume in India Plummets Following Bill Introduction

Not surprisingly, cryptocurrency exchanges in India began recording significant declines in trading volume on Friday. Popular Indian crypto YouTuber Aditya Singh recently posted screenshots on Twitter depicting a plunge in trading volume across four of the nation’s top cryptocurrency exchanges, including Coindcx, Bitbns, Zebpay, and Wazirx.

Another Indian crypto commentator Shivam Chhuneja noted that “this is just the start of the decline of such a great ecosystem that we had in India.” He added: “Our government must think about taxation rules that bolster the industry and their tax revenue at the same time. Many people earn their living from crypto trading.”

Speaking at the Lower House of Parliament, Lok Sabha, last week, the Indian finance ministry explained that “no deduction in respect of any expenditure (other than [the] cost of acquisition) or allowance is allowed.”

 

Commenting on the latest development, co-founder and CEO of crypto exchange Coinswitch, Ashish Singhal, noted:

“A flat 30% tax that does not differentiate short-term capital gains from long-term gains, with no provision for deducting expenses incurred or offsetting losses, is not in tune with the tax framework for other asset accounts classes and is discriminatory.”

That said, the Indian cryptocurrency community has decried the latest tax requirement and has petitioned the government on Change.org to make a more reasonable amendment to the tax policy. At press time, the petition has garnered 103,280 supporters.