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What Does Indian Cryptocurrency Industry Expect From Budget 2024? Here’s The Wishlist
As a temporary worker Budget 2024 looms on the horizon, the Indian crypto industry is abuzz with anticipation, eager to see how the central government will shape the regulatory landscape for virtual digital assets (VDA). Industry experts focus on the urgent need for changes in classification and Taxation of these assets. One of the main demands of the experts is the abolition of the 1% withholding tax (TDS), a measure currently in force. Analysts argue that this measure TDS The rate hinders investor participation by causing capital losses on every transaction, discouraging potential investors from entering the cryptocurrency market.
Leading voices in the sector have expressed their hopes for the 2024 budget:
Rajagopal Menon, Vice President, WazirX
We hope that the Finance Ministry will reduce the tax deducted at source (TDS) rate from 1% to 0.01%. Also, offsetting of losses against realized gains should be allowed. The underlying objective is to ensure a level playing field in the cryptocurrency space, without regulatory or tax arbitrage for any participant.
Sumit Gupta, Co-Founder of CoinDCX
In India’s booming VDA sector, the upcoming Union Budget represents a crucial opportunity to boost its growth. A strategic focus on important measures such as reducing the TDS rate from 1% to 0.01% and aligning the tax rate with the framework applicable to other assets by reducing it by 30% would undoubtedly reinvigorate the sector.
Additionally, considering the creation of a robust self-regulatory body for cryptocurrency and blockchain industry players could be a game changer.
Edul Patel, CEO of Mudrex
The Indian government’s proactive stance towards innovation and responsible growth in the crypto sector is reflected in various measures. The crypto sector in India is anticipating a more balanced and forward-looking tax system. The current 1% TDS on transactions and the lack of clearing are the hurdles. Given India’s leading role in the mainstream adoption of cryptocurrencies, it becomes imperative for the government to address these concerns.
Ashish Singhal, Co-Founder and CEO, PeepalCo Group
As a FIU registered platform and compliant with India’s KYC and PMLA rules, CoinSwitch urges the Indian government to consider the following: i) Reduce the Tax Deducted at Source (TDS) on VDAs from 1% to 0.01%
(ii) Allow for the compensation and deferral of losses resulting from the sale of VDA
(ii) and treat VDA income in the same way as other capital assets
Rahul Pagidipati, CEO of ZebPay
Given the positive developments made during the G20 Summit discussions, we believe that establishing a regulatory framework is essential. These developments, including reductions in capital gains taxes and TDS, would encourage more inclusive participation in the cryptocurrency market.
Additionally, a favorable regulatory environment will drive innovation, enabling the industry to transform existing businesses through the integration of blockchain technology.
Manhar Garegrat, Country Manager, India and Global Partnerships at Liminal Custody Solutions
The government should consider creating special economic zones for Web3 startups and offer tax exemptions to startups for the initial years so that entrepreneurs can focus on innovation and product development without worrying about cash flow.
We call for strategic investments in research and development (R&D) initiatives specifically focused on digital asset security and compliance. This commitment will enable Indian companies to contribute significantly to global solutions and maintain India’s competitive advantage in the digital asset space.
Shivam Thakral, CEO of BuyUcoin
In the upcoming budget, we urge the government to replace uncertainty with clarity, not by being firm but by showing leadership. A well-defined legal framework can unlock confidence and fuel growth. This framework should take into account the complexities of taxation, establishing clear guidelines for revenues and transactions, not as obstacles but as stepping stones. Trading licensing protocols should not be shackles but a badge of honour, ensuring responsible participation.
Nischal Shetty, Co-Founder of Shardeum
The Web3 industry is eagerly awaiting the Union Budget, hoping 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.
The industry would also like the ministry to consider putting in place specific national regulations for India for greater stability and dedicate funds to indigenous blockchain projects, illustrating real-world utility and innovation.
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(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. They do not represent the views of Economic Times)