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Budget 2024: Cryptocurrency industry still waiting for tax rate cut
Cryptocurrency industry players continue to hold out hope for an announcement of reduction of taxes on cryptocurrencies in the final budget, although Interim budget turned out to be a non-event for them, with no mention of the industry.
Some spokespersons claim that the VDA (virtual and digital assets) the industry was hoping for a tax and TDS reliefbut the hopes were not disappointed, even if they were postponed to a later date.
In the meantime, they support the Prime Minister’s direction in favor of research or anusandhan. Their two main demands of reducing TDS to 0.01 per cent and allowing losses to be compensated remain valid, say industry players.
Dilip Chenoy, president, Bharat Web3 Association“Given that this was a voted budget, we did not expect any major changes during the session. We are looking forward to the changes that will be announced after the elections, when the full budget is announced,” the minister said.
Hope persists
An industry spokesperson says the VDA industry was hoping for a tax break as it plays a vital role in facilitating decentralized storage.
“While the VDA sector was hoping for tax and TDS relief, we remain optimistic that the comprehensive budget will bring positive developments, including reduced taxation and a supportive policy framework. The VDA industry, rooted in digitalization, innovation and research, plays a pivotal role in facilitating decentralized storage, fractional ownership, metaverse development, interoperability, scalability and sustainability,” says Sumit Gupta, co-founder, CoinDCX.
Rajagopal Menon, Vice President, WazirX says, “We believe crypto and VDAs can be a force multiplier to achieve Viksit Bharat by empowering individuals at the grassroots level. Digital public infrastructure and the Prime Minister’s ‘Anusandhan’ aspiration will benefit from the incorporation of provisions for long-term financing of national crypto projects, given that India is at a pivotal phase of the revolution cryptographic. We expect these developments to be reflected in the government’s agenda as well as our current demands to reduce TDS rates to 0.01% and compensate traders for losses.
“The interim budget had limitations that prevented the necessary fiscal adjustments for the sector. On a positive note, the Indian government now has the opportunity to introduce comprehensive crypto regulations and enhanced tax policies in the next full budget. We continue to urge the government to allow loss set-off and carry forward, reduce TDS on VDA from 1% to 0.01%, and treat VDA income on par with other capital assets,” said Ashish Singhal, Co-Founder and Group CEO, PeepalCo.
Focus on innovation
Spokespersons welcome announcement of ₹1 lakh crore corpus in long-term loans encourage innovation in the sunrise sectors
“In this interim budget, Finance Minister Nirmala Sitharaman sets out a strategic plan for continued economic progress, resonating with India’s ambition to achieve developed nation status by 2047. With a strong emphasis on focus on promoting innovation and adopting digital transformation, it charts the path towards inclusive growth,” says Sumit Gupta of PartDCX.
“At a broader level, the budget is a statement of intent. The long-term loan corpus of Rs 1 lakh crore to encourage innovation in emerging sectors and the renewed commitment to developing advanced technologies will be the GDP multipliers for the decade to come,” adds Singhal of PeepalCo.