How would tax on crypto assets impact industry?

livemint.com:

The government has clarified that investors won’t be allowed to offset losses in one crypto asset against gains in another, and that crypto mining infrastructure costs will not be included in the cost of acquisition to be claimed as a deduction. Mint looks at the ramifications:

How are crypto investments taxed?

The Union Budget 2022-23 in February proposed that gains from virtual digital assets or crypto assets would be taxed at 30% irrespective of the individual’s income tax slab. In addition, a 1% tax deducted at source or TDS was introduced on the transfer of such assets. The government did not say if crypto assets are to be treated as currency, commodity, or security, and a clarification is expected in due course via separate legislation. Gifting of crypto assets to non-relatives is also taxed in the hands of the recipient if the value exceeds ₹50,000 in a year.

How does crypto tax differ from others?

If listed shares are sold within 12 months of purchase, short-term capital gains (STCG) tax is applied on the gains, while beyond one year, long-term capital gains (LTCG) tax is levied. STCG is levied at 15.6%, including cess, while LTCG for gains over ₹1 lakh is 10.4%, including cess. There is no provision of long-term or short-term crypto assets, while gains are taxed at a flat rate of 30%. Investors in equities can offset the loss in one stock against another, while they can carry forward both short-term and long-term loss for eight assessment years. This has not been allowed in crypto.

How will crypto tax impact investors?

In a fiscal year, if an investor had made gains in bitcoin and losses in ether, he or she will have to pay tax at 30% on gains in bitcoin. Further, the absence of loss set-off provision would