Indian parliament member The Indian tax authority has seized 11 crypto exchanges for alleged tax evasion totaling Rs. 95.86 crore (US$12.6 million).
In January, CoinDesk reported that India’s Directorate General of GST Intelligence (DGGI), which oversees tax collection, had previously seized around Rs. 84 crore (about $11.0 million) in taxes and a further Rs. 1.1 crore ($145,000) in penalties.
Pankaj Chaudhary, India’s state minister for finance, said the figure was closer to 95.86 crore ($12.6 million).
A member of India’s Parliament initially asked Chaudhary to describe the tax seizures.
In January, DGGI confirmed securing funds from only six crypto exchanges, including India’s biggest exchanges: WazirX, CoinDCX, BuyUCoin, and Unocoin. As of Monday, Chaudhary reported 11 exchanges.
Tax authorities in India conducted search operations on WazirX, CoinSwitch Kuber, CoinDCX, BuyUCoin and Unocoin after what they considered to be tax evasion of Rs. 40.5 crore ($5.3 million). In a statement, the tax authority said the case was part of an anti-tax evasion campaign.
In addition to cracking down on tax evasion, the country has introduced tough new crypto tax rules. A capital gains tax of 30% will be imposed on crypto transactions by April 1 for Indian crypto companies. The 1% tax will be deducted at source by July 1 for Indians who purchase or sell cryptocurrency in addition to the capital gains tax.
A lawmaker in the Indian parliament has urged the government to increase the tax on crypto income from the current proposed rate of 30%, pointing out that crypto trading is similar to gambling. A GST (goods and services tax) should also be levied on the total transaction value of crypto, according to him.
A member of the Indian Parliament wants to tax crypto income at more than 30%
Rajya Sabha, the upper house of the Indian parliament, is currently considering the Finance Bill 2022, which proposes a 30% tax on cryptocurrency income.
In a letter to the government, Parliament member Sushil Kumar Modi asked to raise the tax rate on cryptocurrency income from 30% to 40%. He explained:
I request that the finance minister consider increasing the 30% tax on crypto even further in the coming days.
Modi asserted that cryptocurrency is not an asset, a commodity, a good, or a service, saying that it lacks intrinsic value.
According to him, while stocks are backed by companies, “crypto is gambling.” He further questioned, “Who backs crypto?””
Moreover, the parliament member noted that the 18% goods and services tax (GST) is only applied to crypto service providers, such as exchanges, and that this needs to be increased. The member stated:
As with lottery tickets, casino bets, gambling, and horse racing, cryptos are similar. As a result, 28% tax (GST) is imposed on all these activities. I am requesting the GST council to consider imposing GST on crypto transactions as well.
Investors are attracted by extraordinary profits, Modi said, adding that “no one knows what bitcoin is worth.”
Modi gave examples of countries that impose higher taxes on crypto. A 55% tax is imposed in Japan, while up to 45% is imposed in Germany, France, and Australia.
Further, the parliament member claimed that investors have been storing cryptocurrencies in private wallets before April 1 and “$8 billion worth of crypto assets are expected to leave the country.”
In addition to the 30% tax on crypto income, Nirmala Sitharaman proposed a 1% tax deducted at source (TDS) on crypto transactions. In addition to the 1% TDS, the 30% income tax will be imposed on April 1. The Indian parliament has warned that imposing a 1% transaction fee on crypto transactions will kill the nascent asset class.
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