Indian Crypto tax policy to clarifies that every digital asset investment independently

The government aim to treat each crypto trading pair transaction separately, deterring traders as it would only tax their profits without accounting for the losses

 Indian Crypto tax policy to clarifies that every digital asset investment independently

Indian crypto tax policy became even more complicated just a week before the new tax laws are to come into effect, A new parliamentary note answering queries about the new tax policies on virtual digital assets suggests that traders can't offset their losses from one digital asset against profit on another. 

The new tax policy waits for April 1 to come, many experts claim the latest notification from the government. the crypto tax policy of the government expects traders to clarify each investment and profit or loss on a digital asset independently.

Suppose, if a trader invests $100 in Bitcoin and Ether and they gain a profit of $100 on Ether and loss of $100 on Bitcoin, then traders need to pay 30% tax on the profit of Ether without accounting for losses on BTC.

Wazirx founder Nischal Shetty said the tax policy is regressive and "unbelievable" but remains hopeful the government will change its stance.

“Treating profits and losses of each market pair separately will discourage crypto participation and throttle the industry’s growth. It’s very unfortunate, and we urge the government to reconsider this.”

The latest burden of treating each crypto trading pair independently. the 1% tax deduction at source on each transaction 

Naimish Sanghvi Crypto entrepreneur suggested that traders should sell everything they have before March 31, 2022, and start from April 2022.

India is yet to finalize a regulatory framework for the crypto industry despite several assurances by the government since 2018, the finance ministry has made it clear that the industry would gain any legal status only after the passing of the crypto bill.

The crypto tax policy seems to be inspired by the country's gambling and lottery tax laws, which somewhat reflects the government's approach toward the crypto market. 

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