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Budget 2024 Expectations: From Tech Innovation to Tax Regularization, What the Crypto Industry Expects from the Budget
With less than a week to go for Union Finance Minister Nirmala Sitharaman to present the interim budget, players in the Indian crypto sector are hoping for the introduction of a well-defined legal framework and regularisation of the tax structure to address fiscal complexities.
With less than a week to go for Union Finance Minister Nirmala Sitharaman to present the interim budget, players in the Indian crypto sector are hoping for the introduction of a well-defined legal framework and regularisation of the tax structure to address fiscal complexities.
The digital asset industry anticipates a much more nuanced approach to defining virtual digital assets (VDAs). Furthermore, implementing policies to boost innovation and research and development is also key to a stronger crypto industry in the country.
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The digital asset industry anticipates a much more nuanced approach to defining virtual digital assets (VDAs). Furthermore, implementing policies to boost innovation and research and development is also key to a stronger crypto industry in the country.
“Tokenization of real-world assets represents a $10 trillion opportunity and we are already witnessing rapid advancements in tokenized RWA. There is an urgent need for investment and innovation in these segments, if progressive policies are encouraged, India has the potential to become a global leader in the digital asset space. We urge the government to amend the definition of VDA, explicitly excluding tokenized assets with proven underlying value, similar to established precedents like gift card exemptions,” said Manhar Garegrat, Country Head, India and Global Partnerships, Liminal Custody Solutions.
With the wider adoption of AI and other advanced technologies, Tapan Sangal, founder of Mai Labs, believes that 2024 is the year of “transition from fundamental learning to imperative application of lessons” for the blockchain industry.
“The upcoming budget is a testament to our confidence in the government, which is calling for a reconsideration of the tax system for the virtual digital asset sector, fostering a regulatory environment that optimally harnesses technological innovation. Ethical considerations and robust regulation are paramount to prevent inequality and manipulation in this dynamic landscape,” Sangal said.
Manhar Garegrat also advocated for the removal of the 1% tax deducted at source (TDS), which has affected policies that discourage domestic participation in the digital asset market.
“This incentive will attract investments, create highly skilled jobs and cement India’s position as a global leader in safe custody of digital assets. Just like stocks, users should be allowed to offset losses on digital assets, which will encourage more startups to enter this space,” Garegrat noted.
For the industry to thrive in the country, it is important that the government not only focuses on tax regularization but also on Web3 startups and creates special economic zones.
“The Web3 industry is eagerly awaiting the Union Budget as it hopes to provide another opportunity to support a thriving and responsible Web3 ecosystem in India. Web3 and blockchain, in the future, can solve many of India’s challenges in sectors like payments, education, healthcare, etc.,” said Nischal Shetty, Co-Founder, Shardeum.
The introduction of India-specific national regulations for greater stability and dedicated funds for indigenous blockchain products would help in the development of the Web3 ecosystem, according to Shetty.
Highlighting the need for fiscal and sandbox incentives, Shivam Thakral, CEO, BuyUcoin, said, “We need fiscal and sandbox incentives to nurture these seeds into thriving startups. Sandbox initiatives need to be protected to foster experimentation. This will create a new generation of jobs, propel India into the global DeFi and blockchain space, and unlock economic growth. By embracing crypto with vision and collaboration, India can lead the world towards a digitally inclusive financial future, leaving its competitors in the shadows.”
With the presentation of an interim budget and a full budget after the elections, the cryptocurrency sector awaits the introduction of a fiscal framework and nuanced legal regulation to unleash its true potential.
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