The Indian Ministry of Finance has determined that when calculating taxes, traders will not be able to offset losses in one digital asset with gains in another.
The tax rate on profits from operations with cryptocurrencies is 30%. In response to a parliamentary inquiry, the Ministry of Finance clarified that profits and losses on investments in various virtual digital assets should be considered separately.
Speaking to Cointelegraph, WazirX founder Nishal Shetty called the proposed tax policy "retarded and unbelievable." Despite the fact that the innovations should come into force as early as April 1, he hopes for a change in the position of the authorities.
“Calculating profit and loss on a per-market basis will discourage participation in cryptocurrencies and hold back the growth of the industry. This is very unfortunate and we urge the government to reconsider the decision,” he said.
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Crypto entrepreneur Naimish Sangvi drew attention to another norm: the cost of mining and other infrastructure costs are also not going to be taken into account by the authorities. He recommended that traders close all profitable positions by March 31 to compensate for losses.
My suggestion to sell off everything applies to those who are in overall profit. That way you can still offset your losses with profits before March 31.
— Naimish Sanghvi (@ThatNaimish) March 21, 2022
If you’re only in profit, or only in loss across all your investments, then it’s wise to just hold! https://t.co/4RxKH8xKOT
Work on the regulatory framework for cryptocurrencies has been underway in the country since 2018. During this time, the public received conflicting signals from the authorities: from a complete ban, even with criminal liability, to possible regulation as assets.
The Ministry of Finance made it clear that the introduction of taxation does not determine the legal status of virtual currencies - this is the prerogative of the relevant legislation.
Against this background, the founder of the Crypto India YouTube channel, Aditya Singh, noted that the tax policy of the authorities regarding digital assets is in line with the approach to the areas of gambling and lotteries.
Seems like, Idea for crypto tax policy came from here. pic.twitter.com/wuUaWQxU2f
— Aditya Singh (@CryptooAdy) March 16, 2022
Recall that Indian Prime Minister Narendra Modi at the World Economic Forum in Davos called for a unified global approach to regulating the industry.
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