An Indian parliament member has urged the government to increase the tax on crypto income from the current proposed rate of 30%, stressing that crypto trading is similar to gambling. He has also requested that the goods and services tax (GST) be imposed on the total transaction value of crypto.
Indian MP wants to tax crypto income by more than 30%
The Indian Finance Bill 2022 containing the proposed 30% tax on crypto revenues is currently under consideration in Rajya Sabha, the upper house of the Indian parliament.
Parliament member Sushil Kumar Modi reportedly asked the government Monday to increase the tax on cryptocurrency income from the current rate of 30%. He said:
I would like to ask the Minister of Finance that the 30% tax you imposed on crypto, please consider in the next few days if this tax can be further increased.
Parliament member Modi argued that cryptocurrency is not a commodity, an asset, goods, or a service, emphasizing that it does not have intrinsic value.
He added that if stocks are backed by companies behind them, “crypto is a game.” He further asked, “Who are behind the crypto?”
The parliament member further pointed out that the 18% goods and services tax (GST) is only levied on crypto service providers, such as exchanges, emphasizing that this needs to be increased. Modi opined:
Cryptos are similar to lottery, casino betting, gambling, and horse racing. In all of these activities, a 28% tax (GST) is imposed on the total value of the transaction… So I request that the GST council consider imposing GST on the total value of the crypto transaction.
“Investors are attracted by extraordinary profits,” Modi stressed, adding that “no one knows what is the value of crypto.”
Modi then gave examples of countries that have imposed higher taxes on crypto. He said Japan imposed a 55% tax while Germany, France and Australia imposed up to 45%.
The parliament member further claimed that investors have been storing cryptocurrencies in private wallets before April 1 and “$8 billion worth of crypto assets are expected to go out of the country.”
Apart from the 30% tax on crypto income, Indian Finance Minister Nirmala Sitharaman has also proposed imposing a 1% withholding tax (TDS) on every crypto transaction. The 1% TDS will come into effect on July 1 while the 30% income tax will start being levied on April 1. An Indian member of parliament has warned that imposing a 1% TDS on every crypto transaction will kill the nascent asset class.
