• Changes sought in 1% transaction tax
• Demands clear and stringent regulations

 

An Indian crypto advocacy group has written to the country’s Finance Ministry to provide suitable tax relief in the upcoming budget. It has also sought changes in government’s tax policy that does not allow offsetting of losses against profits. Besides, a change in the 1% transaction tax deducted at source (TDS) figures in its list of demands from the Indian Finance Ministry.

Case against High Taxation         

“The BWA aims to highlight the impact of the existing tax provisions such as TDS, tax on income from VDAs, and not allowing carrying forward of losses on the wider industry and share its inputs on suitable amendments which can help address the concerns of the government and at the same time allow growth of this sector,” the newly-formed Bharat Web3 Association (BWA) told Business Standard.

BWA has also requested the Indian government to put in place a strict regulatory policy for the crypto sector in light of FTX’s collapse, which according to it is a lack of corporate governance. 

“The key underlying issue in the case of FTX is lacunae in corporate governance which we have witnessed in the case of traditional finance as well and have taken considerable efforts from different stakeholders. However, there is only that much that the industry can do voluntarily, which is why we have been trying to engage with the government on ensuring strong regulatory and compliance provisions, which all players can abide by,” BWA explained. 

Indian Budget 2023-24

Indian Finance Ministry is currently engaged in formulating plans and policies for the next financial year and these will be presented in the Union budget 2023-24 in February. As part of the budget preparation, it is holding wider consultations with the different industries and their stakeholders. BWA’s outreach to the Indian Finance Ministry for relaxations in tax provisions and a clear regulator environment for the crypto sector is a timely step.

BWA was formed last month after Blockchain and Crypto Assets Council (BACC) was disbanded by the Internet and Mobile Association of India (IAMAI) in July. Most of the members of BACC such as Coinbase, Polygon, WazirX, CoinDCX, CoinSwitch Kuber, and Murdex are now members of BWA.