Synopsis
Industry experts are looking forward to potential reforms in the upcoming budget to address critical challenges faced by the cryptocurrency sector in India. The focus is on tax reductions and regulatory changes to encourage growth and innovation within the industry.
As the newly elected NDA government prepares to present its full Budget for the FY2024-25, all eyes are on Finance Minister Nirmala Sitharaman. Among the many sectors eagerly awaiting the announcements, the cryptocurrency industry has high hopes for favorable reforms that could significantly impact its growth and regulatory landscape.
Industry experts have outlined a clear wishlist ahead of the Budget, focusing on critical issues such as the high transaction tax and the inability to offset losses against gains. These concerns have been significant deterrents for investors and innovators in the crypto space. Meanwhile, the crypto community is optimistic that the government will address these challenges to create a more conducive environment for the sector.
Industry leaders have outlined their expectations for Budget 2024:
Edul Patel, CEO, Mudrex
Crypto Tracker
TOP COIN SETSAI Tracker23.71% BuyNFT & Metaverse Tracker20.69% BuyCrypto Blue Chip – 513.49% BuyWeb3 Tracker12.20% BuyBTC 50 :: ETH 5012.04% BuyTOP COINS (₹) Tether84 (0.27%)BuyBNB47,857 (-0.62%)BuyBitcoin5,411,280 (-0.65%)BuyEthereum287,485 (-0.97%)BuySolana13,298 (-1.11%)BuyWe anticipate that the newly formed government will address the critical challenges faced by crypto investors in India. Specifically, the 1% TDS on every transaction and the current inability to offset losses against gains are significant deterrents for investors. Addressing these issues could foster a more favorable environment, encouraging innovation and growth within the sector.
Unlocking India’s manufacturing prowess key to Viksit Bharat
Experts call for Modi government to cut red tapism further in Union Budget
How FM can design India’s long-term investment growth portfolio
Roadmap for turning India into a real estate powerhouse, brick by brick
More News
Dilip Chenoy, Chairman, Bharat Web3 Association
The Indian Finance Ministry invited the BWA to pre-budget consultations. We presented our demands and expectations, including a key request for a reduction in the transaction tax from its current 1% to 0.01%.
We also requested the Finance Ministry to allow the setting off of losses on one VDA transaction against profits on other transactions. We advocated for the government to consider income from the transfer of assets on par with other income sources.
We urge the government to implement clear, industry-friendly regulations, and tax reforms that allow this emerging sector to flourish and create new opportunities and revenue streams
Manhar Garegrat, Country Head India & Global Partnerships, Liminal Custody
For us at Liminal Custody, it is important that the upcoming budget addresses key issues in India’s virtual digital asset (VDA) sector – primarily around taxation. As part of several other jurisdictions that we operate in as licensed and regulated custody service providers, we see regulators encouraging the growth of this nascent sector and we feel India’s economy can tremendously benefit by rationalizing taxation for digital assets.
Shivam Thakral, CEO of BuyUcoin
We expect the upcoming budget to address our grievances and reduce the TDS and capital gains taxes on VDA transactions to reasonable levels, allowing us a level playing field to function and prosper.
We strongly advocate for the establishment of a comprehensive regulatory framework for the virtual digital asset market in India. This framework should be applicable to both Indian and offshore companies, and should ensure a level playing field for all, fostering fair and unhindered operation.
Rajagopal Menon, Vice President, WazirX
The crypto industry is hopeful that the FM will remove or reduce the 1% TDS, allow set-offs for losses, and tax capital gains based on income slabs.
As India is a signatory to the G20 ministerial declaration, we can anticipate crypto regulations by 2025. We hope that regulations will be in the Goldilocks zone — neither too stringent nor too lenient, thus fostering a conducive environment for the industry.
Sumit Gupta, co-founder, CoinDCX
CoinDCX has submitted its requests and recommendations to the Government of India and was also part of the BWA delegation that met with Finance Ministry officials as part of pre-budget consultations. Our key asks include:
To ensure a level playing field for the Indian VDA Industry vis-a-vis the offshore counterparts, we urge the government to expand the scope of the TDS mandate to explicitly include offshore platforms.
Additionally, we advocate for a reduction in the TDS rate under Section 194S(1) from 1% to 0.01%, emphasizing the necessity of a tax-friendly environment to stimulate industry development.
In pursuit of equitable taxation, we propose an amendment to Section 115BBH to reduce the tax rate from 30%, at par with assets in other industries.
Further, we recommend revisiting the threshold limit for tax deduction under Section 194S, suggesting an increase from INR 10,000/INR 50,000 to INR 5,00,000, in coherence with the provisions in Section 194-O of the Act.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times.)
Source
