India’s plans for a 1% tax deducted at source (TDS) on every crypto transaction will result in huge losses for the government, Indian crypto exchange WazirX founder Nischal Shetty said on Wednesday.
See related article: Indians see future in crypto, government sees revenue, FM says
Fast facts
- Shetty argued more revenue is to be expected by bringing a 1% TDS on cryptocurrency transactions, but actual profit will be much lower due to higher annual tax refunds.
- He advocates for a 0.1% TDS which would improve government earnings by lowering tax refunds, and easing the burden on traders, according to Shetty’s calculations.
- The Indian government in February announced a 30% tax on crypto income as well as a 1% TDS on every transaction.
- The finance minister Nirmala Sitharaman said on Tuesday that many Indians see a future in cryptocurrencies and the government sees opportunities for revenue in the asset class.
- However, Shetty’s math turns the table and points at tax revenue losses for the government.
- “[With] very little to refund, traders don’t get affected much, they can continue to trade and make more profits. More profits = more income tax for the government,” he said.
See related article: Indian exchanges scramble to implement crypto tax by April 1 deadline