The hashtag “#ReduceCryptoTax” is trending on social media, as Indian crypto advocates try to argue for fairer regulation of the digital asset space in India.
What Happened: In anticipation of the Interim Budget 2024-25, scheduled for presentation by India’s Union Finance Minister Nirmala Sitharaman on Feb. 1,nsocial media users are urging changes to cryptocurrency tax regulations.
Despite appeals for a revision of crypto-related tax laws over the past two years, the government has not made significant adjustments.
The current tax slab of 30% is higher than that for other sources of income, salary, or capital gains.
Additionally, there is a call for a decrease in the Tax Deducted at Source (TDS) on each crypto transaction, seeking to bring it down to 0.01% from the existing 1%.
Indian stock exchanges have been cautious about offering crypto brokerage services due to the perceived risks associated with the nascent nature of the crypto sector.
See Also: Apple Axes Binance, Other Global Crypto Exchanges From India App Store Amid Legal Heat
Why It Matters: Behavioral Finance and Capital Markets expert Siddartha Rastogi shared with Benzinga his opinion on the approach to crypto tax in the Interim Budget.
“Nothing is going to change,” due to concerns about the black money movement in crypto, he stated. Loosening tax policies could lead to illegal money entering the country, affecting development.
From investors’ perspective, tax rates impact participation and liquidity, but the government aims to enhance compliance before adjusting rates. As an interim budget – for 3 months – major changes are unlikely.
Katalyst Advisors, Executive Director Binoy Parikh, said, “Since this would be an interim budget, very limited changes are expected on the tax front.” He sees the rationalizing of withholding tax provisions will lead to higher volumes in the crypto space. He adds that with the volatile crypto market, “set off of losses on crypto losses should be permitted to be set off against other incomes and be permitted to be carried forward.”
Crypto Community Voicing Opinions: The CEO and Co-Founder of Unocoin, Dr. Sathvik Vishwanath, stated in a recent X post, “Unfair taxation is not only setting our #crypto industry behind but also increasing the time needed to fix deficiencies & compete…
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