The government announced the Crypto Tax Amendments that are approved by the Lok Sabha and it is set to be implemented starting from April. As per the new law loss in the crypto assets cannot be set off against gains in crypto assets.

Highlights

Amendments introduced in the Finance bill passed by the Lok Sabha
Tax on virtual digital assets subject deals in section 115 BBH of the Bill
The amendments include the dropping of the word like ‘other’

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Tax on the digital virtual assets (VDAs) or ‘Crypto Tax’ was placed in the Budget Session of 2022-2023 and it is ready to be implemented in the currency from April 1 onwards as the Lok Sabha passed the Finance Bill 2022.

The Government also passed the amendment in the Finance bill relating to the clarification on taxation of virtual assets.

Section 155 BBH deals with the tax imposed on virtual digital assets. Cryptocurrency tax will be regularized by the government authority directly to the customers. Clause (2) (b) prevents loss on the trading of cryptocurrency assets from being set off against income under “any other provision” of the IT Act.

With the effect of the amendment, the word “other” has been removed. Under the new amendments statute, loss from crypto assets can’t be set off against gains Crypto-assets as well,

The crypto exchange platform exchange WazirX is dealing with a huge percentage in India and the CEO of the platform Nischal Shetty, the founder of WazirX said

“The proposed 30 Percent tax irrespective of whether crypto-assets are capital assets or not will be detrimental to the investor growth that the industry has been seeing so far. The move will make day traders capable of saving on taxes even if they are not even in the income tax brackets currently,” said the CEO of WazirX.

He further added “furthermore, not allowing investors to offset losses from one crypto trading pair by gains from another type will further deter crypto participation and throttle the industry growth,” Nischal stated.

He also commented on its move as “the new rules and regulations will not satisfy the government’s desires.

He said “it can result in cascading participation on Indian exchange that adhere to the KYC norms and lead to a rise in capital outflow to foreign exchange or to the ones that aren’t KYC compliant. This is not conducive for the government of the crypto ecosystem of India,” WazirX said.

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