Synopsis
A survey by Mudrex reveals that 85% of Indian crypto investors want tax reforms, especially reducing the 30% tax on gains. Investors prefer lower tax rates (0-20%) and the ability to offset losses like equity trading. The demand for tax revision reflects growing concerns as the Union Budget 2025 approaches.
As the Union Budget 2025 approaches, a recent survey by Mudrex, a platform for crypto investments, shows that most Indian crypto investors want changes in the tax system. The findings indicate a strong demand for tax revisions, with the majority of participants advocating for lower rates and more flexibility in the taxation system for cryptocurrency investments.
Survey Highlights:
30% Tax on gains is a major concern
The survey found that the most discouraging aspect of crypto trading for Indian investors is the 30% tax on gains. A significant 67.5% of respondents cited this as their primary concern. In contrast, only 7.14% mentioned the 1% TDS on transactions as a discouraging factor, while 5.19% pointed to high fees collected by exchanges.
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Majority support a tax reduction
When asked if the current tax structure, which includes a 30% tax on crypto gains and a 1% TDS on transactions, should be revised in the upcoming budget, 85% of respondents agreed that it needs to be reduced. Only 7.14% felt that the existing tax regime was acceptable, while 7.79% were unsure about the matter.
Did you Know?
The world of cryptocurrencies is very dynamic. Prices can go up or down in a matter of seconds. Thus, having reliable answers to such questions is crucial for investors.
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Preferred tax rates for crypto investments
Investors also expressed their preferred tax rates for crypto gains. Nearly 44% of respondents believe that a tax rate between 0-10% would be fair, while 32.5% support a tax range of 10-20%. A smaller portion, 6.49%, favored a tax rate of 20-30%, and 17.5% believe no tax should be levied on crypto gains.
Support for short-term and long-term capital gains framework
The survey revealed that 66.23% of participants would like crypto investments to be taxed under the same framework as short-term and long-term capital gains in equity trading. Only 33.77% disagreed with this suggestion.
Offsetting losses and gains
In a strong call for more flexibility, 89.6% of respondents believe that crypto traders should be allowed to offset losses against gains, similar to equity trading. Only 10.4% opposed this idea.
What does this mean for Budget 2025?
The survey results reflect a clear demand for reform in the tax structure for cryptocurrencies. With the majority of respondents advocating for lower taxes and more flexibility in accounting for crypto-related losses and gains, it is likely that the Union Budget 2025 will be under scrutiny to address these concerns.
As crypto trading continues to grow in India, it remains to be seen whether the government will heed the calls for a tax overhaul to align with the preferences of investors.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
