The Central Board of Direct Taxes (CBDT) is gearing-up to release a list of frequently asked questions (FAQs) around the crypto tax system introduced this year in India. As per Sangeeta Singh, the chairperson of CBDT, these FAQs will be released around July 1, that is twenty-two days away at the time of writing. Singh was speaking at an event hosted by Income Tax Department in Delhi when she made these statements. The aim of publishing these rules is to provide clarity on the crypto community of the country.
The CBDT is India’s apex authority governing the country’s overall tax regime. It falls under India’s finance ministry.
“We are working on the FAQs for clarity on cryptos, and we will release it before July 1,” Singh, a 1986 batch Indian Revenue Service (IRS) officer, said in her statement.
Crypto profits in India have been made eligible for tax deductions this April.
While a 30 percent tax has been levied on profits generated via crypto trading in India, the laws also mandate one percent TDS on each crypto transaction.
Crypto industry experts, players, and community members of India have been asking the government to re-consider the tax bracket given the newness of the crypto sector.
Will India see a HUGE brain drain due to Crypto tax which will impact Web3 Startups/innovation? #Web3
— SantoshPanda.eth | Foundership (@santoshpanda) March 22, 2022
Following the announcement of these crypto laws, research firm Crebaco had reported that the volume of cryptocurrency trading in India nosedived by up to 70 percent since the tax laws came into effect.
India has been introducing new rules in order to keep transactions of virtual digital assets, traceable.
The government aims to curb potential misuses of digital assets for money laundering and terror financing.
For now, the nation awaits legal frameworks and classification clarity around virtual digital assets (VDA).
Meanwhile, Asia is witnessing a constant growth in the crypto sector, especially from affluent investors from the nations of India, Vietnam, China, Indonesia, Japan, Malaysia, Singapore, and Thailand, a report by Accenture said this week.
As per this survey, India contributes by seven percent on the chart representing the percentages of crypto and NFT holdings in Asia. This brings India ahead of Singapore, Japan, and Vietnam — that reflect six percent, three percent, and four percent in digital asset holdings on the Accenture survey graph.