Crypto tax introduction is detrimental to India, says CoinSwitch’s CEO
The Indian government introduced a cryptocurrency tax a few months ago and some industry experts have been against it.
Ashish Singhal, Co-founder and CEO, CoinSwitch Kuber, says the tax imposed on cryptocurrency transactions will prove to be detrimental to the growth of the crypto space in India.
The CEO said the tax will discourage retail investors to venture into the cryptocurrency space. Singhal said;
“With this, we have taken a step backwards. If a regressive provision such as this would have been applicable in equities, it would have discouraged retail investors from participating.”
He mentioned this earlier today after the Indian government said investors will not be allowed to offset gains from one cryptocurrency against losses from another. Singhal added that;
“We fear the lack of provision to offset losses will drive away users from KYC-compliant exchanges and platforms to the underground peer-to-peer grey market, which would defeat the purpose of the tax."
Union Finance Minister Nirmala Sitharaman announced a hefty 30% tax on gains from digital assets a few months ago. However, retail and institutional investors have been waiting for clarity regarding how exactly the taxation policy will work.
Minister of State for Finance Pankaj Chaudhary provided an answer to this, stating that;
"As per the provisions of the proposed section 115BBH to the Income Tax Act, 1961, loss from the transfer of Virtual Digital Assets (VDA) will not be set off against the income arising from transfer of another VDA."
Singhal is not happy with the government’s stance on cryptocurrency taxation, adding that;
“The Budget recognised VDAs as an emerging asset class. Therefore a natural course of action would have been to progressively bring the regulations at par with other asset classes."
India remains one of the largest cryptocurrency markets in the world. However, the unclear regulatory stance in the country continues to inhibit the massive adoption of Bitcoin and other cryptocurrencies.