Chase India and Indus Law also said in the report that many crypto markets are not following TDS rules despite coming under the purview of the rule.
Image credit source: Getty Images
to the government budget 2023 in Cryptocurrency Trade TDS on (Tax Deduction at Source) Should consider reducing it to less than one percent. The reason for this is capital outflow due to high tax rate and investors are leaving from foreign jurisdictions and unauthorized markets. This was said in a report on Tuesday.
Chase India and Indus Law in their joint report on the impact of one per cent TDS on Virtual Digital Assets (VDA) said that platforms/marketplaces facilitating crypto trading should also due diligence on their customers. Due to this, if there is any possibility of risk in future, it can be brought to the fore.
today’s big news
According to the report, in the absence of comprehensive regulation, on the one hand capital is flowing out of the existing one percent TDS on crypto trading, while on the other hand, customers are moving out of business platforms and unauthorized markets coming in jurisdictions of other countries. It is noteworthy that from April 1 last year, the government imposed surcharge and cess along with 30 percent income tax on the transfer of virtual digital assets like crypto currency including bitcoin, ethereum. Also, one per cent TDS was levied on payment of virtual digital currency above Rs 10,000.
Why was TDS imposed on crypto
According to the report, the purpose of imposing TDS was to detect transactions in crypto. This target can also be achieved by reducing the rate of tax deducted at source. TDS at a lower rate will not only enable traceable transactions but also increase tax collection if Indian investors continue to do business through Indian platforms with KYC (Know Your Customer).
advice given to finance minister
This report has been released before the budget. Finance Minister Nirmala Sitharaman will present the budget for 2023-24 on February 1. It also suggested that for security and surveillance purposes, the government should mandate all crypto markets/platforms to conduct detailed KYC verification of investors/traders, similar to the Aadhaar regulations. Chase India and Indus Law also said in the report that many crypto markets are not following TDS rules despite coming under the purview of the rule. In many cases, it has been seen that the crypto platform has been wrongly exempted. These flaws need to be removed.