Crypto industry asks Centre to rethink on proposed TDS

economictimes.indiatimes.com:

budget proposal to impose a tax deducted at source, or TDS, on virtual digital asset transactions, saying it will be difficult to comply with. The industry also urged the government to reconsider the decision to levy a tax of 30% on current market value when crypto assets are gifted or given to employees as part of their remuneration, saying the tax is levied without waiting for the receiver to sell it and book any profit. These issues figured when representatives of leading domestic crypto exchanges met with finance ministry officials on Friday to discuss budget proposals, people familiar with the deliberations told ET.

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They submitted their representation on some of the key concerns. Finance minister Nirmala Sitharaman has proposed a 30% tax on gains made from any private virtual digital assets from April 1. The budget has also proposed a 1% TDS on payments towards virtual currencies beyond Rs 10,000 in a year and taxation of such gifts in the hands of the recipient. Many experts said crypto taxation required more discussion before implementation as the current proposals lack clarity on various issues. «They are not banning crypto but killing it with tax compliance,» a crypto industry official told ET on condition of anonymity. «TDS is technically not feasible as tracking down identity becomes difficult.» Responsibility of paying 1% TDS lies with the purchaser at the time of payment. This would be difficult to comply with in situations where assets are being bought from a non-resident seller and domestic exchange only facilitates