‘Fantastic step’, says 0xdotTV founder Nikhil Chinapa on 30% crypto tax

Founder of cryptocurrency portal 0xdotTV and DJ Nikhil Chinapa said that the recent decision to impose 30 per cent taxation on income through digital assets is a “fantastic move” by the government as it will provide cryptocurrency “some sort of legitimacy”. In his interaction with Business Today’s executive director Rahul Kanwal over a Facebook live session titled Future of Cryptocurrency in India, Chinapa further said that though the tax on crypto – 30 per cent and 1 per cent TDS is a welcome move, crypto investors and exchanges have a lot of doubts and questions.
 
“I think it’s a fantastic step that the government has taken to tax and to give some sort of legitimacy even though it [has] not legitimised crypto and cryptocurrency but think that this tax – 30 per cent and 1 per cent TDS has raised a lot of questions and doubts. Everybody in the crypto space is now waiting for the government to put some sort of regulatory framework around crypto and cryptocurrency,” Chinapa said.
 
He further explained that the crypto community was not hoping that the government will term crypto as a legal tender while adding that the community is dropping the usage of the term cryptocurrency. “For people who are not a part of the crypto ecosystem, who’ve been talking about the fact that taxing crypto doesn’t mean that they’ve legitimised, well you’re right but nobody in the crypto space was looking for cryptocurrency to be made into a legal tender. In fact, cryptocurrency as a term is being dropped by the community,” he noted.
 
Anoush Bhasin of the crypto exchange Bitfinex, on the other hand, believes that a 30 per cent taxation on income generated due to crypto transactions is “slightly unfair” as it categorises income from virtual digital assets as income similar as betting and gambling, which was not the categorisation the ecosystem was eyeing.
 
Bhasin further states, “There are a lot of underlying nature of transactions in crypto. Trading or investing and profiting off them is just only one bit. There’s getting involved with smart contracts, there’s content creation, there’s mining, there are so many different types of activities that should be given the status of legitimate businesses and then be allowed to offset their expenses, deductions and get taxed at a net level according to whatever tax slabs shall be applicable.”
 
Meanwhile, Chairman of the Central Board of Direct Taxes (CBDT) JB Mohapatra pointed out that a 30 per cent tax rate on crypto transactions is not high, adding this rate could have been ever higher. Mohapatra said, “I do not think the 30 per cent tax rate is high for cryptocurrencies. Companies are being taxed at 30 per cent. It is not the maximum rate. It is not the upper end of the taxing powers of the government. It could have been more but we pegged it at 30 per cent.”
 
NITI Aayog CEO Amitabh Kant, on the other hand, advocated for a well-curated, pro-innovation-led soft-touch regulation in the sector. “Without getting into merits, I feel what we need is a well-curated, pro-innovation-led soft touch regulation in this sector that can ensure protection of interests of investors and address concerns surrounding the misuse of technology,” he said.
 
Kant further expounded, “There is certainly scope to learn from the best practices- currently extant around the world along with existing global regulatory templates. This can also provide a nudge for the participation of the aspiring and mature tech talent pool of India in the innovation cycle that crypto offers in the newly emerging decentralised Web 3.0 ecosystem.”
 
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