Budget is a missed opportunity, say cryptocurrency startups

Crypto startups have expressed disappointment over the 2024 budget as they had anticipated cuts in tax rates on virtual digital assets (VDA). Finance Minister Nirmala Sitharaman made no announcements regarding cryptocurrency taxes in the budget, which the cryptocurrency industry sees as a missed opportunity to support cryptocurrency startups and investors.

“We were hoping that the government would reduce taxation to bring it in line with others active “Unfortunately, this issue has not been addressed, representing a missed opportunity to support cryptocurrency startups and investors,” said Ashish Singhal, co-founder of Lemonn and CoinSwitch.

Meanwhile, Vikas Singh, Co-Founder, NFTFN, said, “There was an expectation that the government would align its tax policy with other asset classes to foster growth and investment. Unfortunately, this opportunity was not seized, which is a missed opportunity to further support startups and investors in the crypto space.”

Cryptocurrency Tracking

Currently, crypto investors in India are subject to a 1% tax deducted at source (TDS) on every cryptocurrency transaction. Profits from cryptocurrency trading or asset transfers are taxed at 30%. Additionally, strict rules prevent crypto losses from being offset against other income, such as salary or business income, nor carry forward to subsequent years. Only the costs of acquisition is deductible. Sumit Gupta, Co-Founder, CoinDCX, highlighted the industry’s continued efforts to advocate for a more favourable tax framework: “For investors, we had anticipated some relaxation in the tax framework in this budget. We will continue to push for rationalisation of the tax framework, which includes reducing TDS to 0.01%, allowing loss relief on VDA transactions and changing the 30% tax on capital We have provided data-supported analyses on capital and user flight and potential increases in government spending. income “The tax structure should be revised. We are still hopeful that the government will consider our demands and implement changes in the future,” said Edul Patel, CEO and Co-founder of Mudrex, who offered a balanced perspective: “Finance Minister Nirmala Sitharaman’s decision to maintain the current tax rates on Virtual Digital Assets (VDAs) has both pros and cons. On the one hand, not updating the tax laws could deter new investors and slow down the growth of the sector as the current tax regime could act as a barrier to wider adoption and investments. On the other hand, maintaining stable tax rates provides predictability to existing crypto investors, which can help support steady growth in the market.”(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. They do not represent the views of The Economic Times)

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