60,000 Indians have signed a petition asking the government to reconsider its proposal to tax crypto at 30%.
Indians against crypto tax
Indians have not had it easy in terms of adopting cryptocurrencies.
A recent petition by change.org urged the Indian government to “introduce reasonable crypto tax policies.” Started by Aditya Singh, founder of the YouTube channel “Crypto India,” the petition urges India’s Prime Minister Narendra Modi and Finance Minister Nirmala Sitharama to amend their proposal to tax crypto at a hefty 30%. More than 60,000 people have signed the petition at the time of writing, arguably an unimpressive number in a country with over a billion people.
The petition points out that about 15-20 million Indians invest in crypto, with several hundred thousand working in the industry. Indians are estimated to hold $8.4 billion AUD in cryptocurrencies. The petition states:
“Crypto Industry also contributes significantly to the country in the form of providing employment, bringing in FDI Investments, GST payments, and Income tax revenues to the government.”
It urges the government to reconsider its proposal to treat crypto like the betting and gambling industries and adjust the proposed tax rate downwards to that of stock market transactions. It also asks to reduce the tax deducted at source (TDS) from 1% to 0.05% and allow loss set-off and carry-forward in crypto markets. Finally, it states that exchange fees, network fees, and interest and royalty payments on NFTs should be included in the cost of acquisition.
What the Indian government plans on doing
The petition comes as a response to a speech by Indian finance minister Nirmala Sitharaman, who announced the launch of a Central Bank Digital Currency (CBDC) by next year to boost India’s economic growth.
The minister underscored that the country needed more digital inclusion in different verticals and announced the fund allocation set in the Union Budget. She also noted that a CBDC would be a “big boost” to the country’s economy and stressed that digital currencies enabled a more efficient and cheaper currency management system.
The big blow to crypto, however, was the proposed 30% tax on cryptocurrency transfers, with no deductions in respect of expenditure or allowance except the cost of acquisition. Losses would not count as compensation against another source of income, dealing crypto investors a double blow. Even though the proposal is an improvement from the outright ban the country’s government was considering, it still leaves Indian crypto investors in dire straits.
How India compares to other countries
Given India’s history as a hub for tech talent, it is surprising that the country is taking such a hard stance on crypto. Compare that to Thailand, which has a much less vibrant IT presence but decided to scrap a plan that proposed taxing cryptocurrencies. Moreover, the Indian rupee is far from the hard currency that citizens can count on to retain its value – similar to the 40 other currencies Bitcoin beats out in terms of stability.
Even though the petition brought forward is unlikely to succeed, Indian crypto investors will have to continue the fight if they want to keep their country’s crypto industry alive. After all, what other option do they have?