Crypto industry wants 0.1% TDS, Sebi-like regulator in Budget 2023

business-standard.com:

Apart from reducing the tax deducted at source (TDS) rate on crypto's transfer from the current 1 per cent to 0.1 per cent, the Centre must set up a regulator for the industry much like the Securities and Exchange Board of India (Sebi) in the upcoming Budget 2023, experts told Business Standard.

Currently, a person is mandated to pay a 30 per cent tax on withdrawal and an additional 1 per cent TDS on the transfer of crypto assets in India. It was introduced in the last Budget by Finance Minister Nirmala Sitharaman.

"Through our representation for the upcoming Union Budget 2023–2024, we have suggested that the rate of TDS be brought down to 0.01 per cent," said Sumit Gupta, co-founder and CEO of crypto investment firm CoinDCX.

According to Rajagopal Menon, vice-president at crypto exchange WazirX, 1 per cent TDS "has had a crushing effect on day traders and short-term investors' capital". It has also pushed Indian investors to foreign exchanges.

"Exchanges out of India do not have to follow this regulation and as such, such a high TDS rate discourages investors to trade in the Indian exchange," said Ankit Jain, partner at chartered accountancy firm Ved Jain & Associates.

The "purpose of TDS is to create the trail of the transaction and the same can be achieved by reducing tax rate also, while simultaneously helping the traders also by not blocking their capital," he added.

Regulator like Sebi, RBI The meltdown of FTX has brought forth the dangers of an unregulated industry. According to the latest estimates, the money of 9 million investors might have been lost in the collapse of the exchange. In India, the industry is still unregulated and the Reserve Bank of India (RBI) governor Shaktikanta Das does not mince his words