Union Budget 2023 Brings New Crypto Tax Penalties for India
New Delhi, India – The Indian government has introduced new penalties for non-payment of crypto tax deducted at source (TDS), including an amount equal to the unpaid TDS that will be imposed by a joint commissioner, according to reports. The Finance Bill reportedly includes an amendment to the Income Tax Act that applies to crypto TDS, with a 15% interest per annum imposed for late payments. Failure to pay TDS on crypto transactions can result in a jail sentence of up to seven years.
No Mention of Cryptocurrency in Minister’s Speech
Indian Finance Minister Nirmala Sitharaman presented the Union Budget 2023 in parliament on Wednesday 01-Feb-2023, with no mention of cryptocurrencies in her speech. The lack of reference to the industry was met with disappointment by the Indian crypto community, who took to Twitter to voice their opinions.
Neeraj Khandelwal, co-founder of crypto exchange Coindcx, tweeted, “No changes to crypto taxation in India in the Budget Session. It stands at 1% TDS and 30% on profits. This puts India at a web3 disadvantage for another year.” Sathvik Vishwanath, CEO of Indian crypto exchange Unocoin, added, “There was no mention of crypto or blockchain in Budget this time. It has been a year since the announcement of 1% TDS was done and we all thought it would affect the industry. It did! Now we need reviving amendments.”
Rajagopal Menon, vice president of crypto exchange Wazirx, commented, “The Indian Union Budget 2023 made no changes to existing crypto taxes, leaving Indian crypto companies on the Stairway to Heaven. There is lingering uncertainty because of high taxes and a lack of a solid regulatory framework which are stifling progress in the industry.”
The lack of a regulatory framework for cryptocurrencies and the central bank’s continued proposal to ban them contributes to the uncertainty that drives crypto companies and investors away from India. The announcement of a 30% tax on crypto income and a 1% TDS on crypto transactions last year resulted in a drop in crypto trading volumes in the country.
In conclusion, the Indian government’s new penalties for non-payment of TDS in the crypto industry, coupled with the lack of regulatory framework and the central bank’s proposed ban on cryptocurrencies, continues to stifle progress in the industry and drive away companies and investors.
