India’s Crypto Tax Policy Proposal to Be Presented to Parliament on March 24

A cryptocurrency tax proposal by India's Finance Minister Nirmala Sitharaman may be on the verge of becoming law, as the lower house of the country's parliament is scheduled to consider the legislation on Thursday.

Sitharaman will table the Appropriations and Finance Bill for 2022 in the House of Commons on Thursday, it was reported on Wednesday. The fiscal bill includes an amendment to the country’s income tax law, identifying “virtual digital assets,” including cryptocurrencies and non-fungible tokens, as taxable investments.

In February, India’s finance minister first announced amendments to existing laws, proposing a 30 percent tax on digital asset transactions. Sitharaman added at the time that losses incurred from crypto trading would likely not be eligible for tax offset against any profits. Furthermore, no deductions are allowed "other than acquisition costs" when calculating income.

Under this tax calculation, traders may pay 30 percent on gains in cryptocurrencies such as bitcoin and ethereum, but don't take losses into account if prices fall. Many experts have criticized the proposal, which will go into effect on April 1 after discussions on Thursday, Cointelegraph reported.

If you lose money on Bitcoin, you cannot offset it with profits on Ethereum. The new tax law was clarified in parliament today.

My advice is to sell all your assets by March 31, 2022. Then start again from April 2022.

Mining costs are also not deductible!

— Naimish Sanghvi (@ThatNaimish) March 21, 2022

The 2022 Finance Bill will be discussed and passed shortly.

We urge the government to reconsider these unfair new tax policies and hope that they will amend them and tax them like a technology tax.

— Aditya Singh (@CryptooAdy) March 23, 2022

The crypto tax policy appears to be a legislative replacement for a previously proposed bill banning "private cryptocurrencies" in India. According to a list of matters recently released by the House of Commons, the Indian parliament has not scheduled to hear discussions on the cryptocurrency bill during the budget session that ends on April 8.

India, home to about 1.4 billion people, has yet to establish a specific regulatory framework for digital assets following the country's Supreme Court decision in 2020 to lift the Reserve Bank of India's ban on banks trading with crypto firms. The tax proposal currently under consideration appears to be the closest the cryptocurrency market has come to gaining some sort of legal status in India.

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