crypto news: What does the Indian crypto industry expect from Budget 2024? Here is the wish list

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 wish list 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 favorable environment for the sector.

Industry leaders have outlined their expectations for Budget 2024:

Edul Patel, CEO, Mudrex We expect the newly formed government to address the critical challenges facing 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 can foster a more favorable environment, encouraging innovation and growth within the sector.

Dilip Chenoy, Chairman, Bharat Web3 AssociationThe Indian Ministry of Finance 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 have also requested the Ministry of Finance to allow the offsetting of losses on one VDA transaction against gains on other transactions. We argued that the government should consider income from the transfer of assets on an equal footing with other sources of income. We call on 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 in which we operate as licensed and regulated custody service providers, we see regulators encouraging the growth of this nascent sector and we feel that India’s economy can benefit immensely from the rationalization of 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 tax on VDA transactions to reasonable levels, allowing us a level playing field to operate 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 foreign companies, and should ensure a level playing field for all, promoting fair and unhindered operation.

Rajagopal Menon, Vice President, WazirXThe 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 sheets.

As India is a signatory to the G20 Ministerial Declaration, we can expect crypto regulations by 2025. We hope that regulations in the Goldilocks Zone will be – neither too strict nor too lenient, thus promoting a conducive environment for the industry.

Sumit Gupta, co-founder, CoinDCXCoinDCX presented its requests and recommendations to the Government of India and was also part of the BWA delegation that met with officials from the Ministry of Finance as part of pre-budget consultations. Our key questions include:

To ensure a level playing field for the Indian VDA industry vis-a-vis its foreign counterparts, we urge the government to expand the scope of the TDS mandate to expressly include foreign platforms.

In addition, we advocate a reduction in the TDS rate under Section 194S(1) from 1% to 0.01%, emphasizing the need for a tax-friendly environment to stimulate industry development.

In the pursuit of fair taxation, we propose an amendment to Article 115BBH to lower the tax rate from 30%, equivalent to assets in other industries.

Further, we recommend that you revise the threshold limit for tax deduction under Section 194S, which proposes an increase from INR 10,000/INR 50,000 to INR 5,00,000, in accordance with the provisions in Section 194-O of the Act. (Disclaimer: Recommendations, , views and opinions given by the experts are their own. They do not represent the views of the Economic Times.)

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