BJP MP suggests increasing tax rate on crypto during parliament session

Sushil Kumar Modi, BJP MP from Bihar, suggested during parliamentary proceedings on Monday that the government should plan on raising the proposed tax rate on cryptocurrency earnings from 30 per cent, claiming that cryptocurrency trading is similar to gambling. 

As per Modi’s speech in the parliament, cryptocurrencies have no intrinsic value and cannot be categorised as a commodity, or asset, or good, or service.

He further said that cryptocurrencies are like gambling because of a lack of central authority that would regulate cryptocurrencies.

The MP went on to say that the 18 per cent goods and services tax (GST) should be extended to crypto service providers such as exchanges

Modi went on to give instances of countries that have higher cryptocurrency taxes than India. He said, “Japan taxes cryptocurrencies at a rate of 55 per cent, while Germany, France, and Australia tax at up to 45 per cent. The USA has 37 per cent taxes on crypto.”

He further suggested to the Finance Minister that cryptocurrencies should be taxed at higher rates in the future.

It is noteworthy to mention that in Japan the 55 per cent taxation on crypto is not a blanket rate for all profits on crypto, but is only for certain tax brackets. Moreover, in Germany, the 45 per cent tax on crypto is on short-term crypto gains beyond 600 euros annually, that too only for certain tax brackets. 

In France, the 45 per cent tax on crypto is for professional traders and miners, that too on gains above 305 euros annually. Furthermore, in Australia, crypto-assets acquired for less than $10,000 are exempted from taxes, and the rates are different for different tax brackets. Finally, the 37 per cent taxes on crypto in USA are only applicable for short term capital gains, that too only on the highest tax bracket.

Finance Minister Nirmala Sitharaman put forth flat 30 per cent taxes on gains and one per cent TDS on cryptocurrencies in India during the Union Budget 2022.