What does the crypto industry expect from the 2024 budget?

The trajectory of cryptocurrency adoption and regulatory frameworks has seen significant milestones. From initial notices and legal implications for participants in 2020 to the 30% tax on gains today, the industry has come a long way. As we approach the interim period Budget 2024The crypto industry sincerely anticipates that the government will address the current challenges, signaling a critical turning point for the sector. Four important concerns
Despite the Indian government’s commendable efforts to foster innovation and responsible growth in the crypto space, four concerns in the existing tax framework require special attention.
First, it is essential to establish a clear distinction in the tax treatment of long-term and short-term capital gains. This distinction would promote the use of cryptocurrencies as a viable tool for long-term wealth creation.

Second, it is essential to tax investors according to their respective income brackets rather than opting for a flat tax rate of 30%. This approach aims to establish a fairer and more nuanced tax structure, reflecting the financial situation of each individual.

Third, it is essential to take into account the possibility of offsetting losses related to cryptocurrencies with gains. This adjustment aims to create a fairer tax framework, aligning with practices applicable to other asset classes and mitigating potential disadvantages for investors.

Finally, the current 1% withholding tax (TDS) rate is a major concern. By advocating for a reduction to a more manageable rate, this proposal seeks to strike a balance between regulatory oversight and fostering a thriving crypto ecosystem.

The path to follow

India has positioned itself as a global leader in the mainstream adoption of cryptocurrencies. The growing community of crypto enthusiasts, developers, and entrepreneurs underscores the sector’s potential to contribute significantly to the country’s economic growth. Therefore, as the government crafts the 2024 budget, whether interim or full, it is crucial to establish a regulatory framework that not only protects the interests of investors but also fosters an enabling environment for the cryptocurrency industry to flourish. Addressing these concerns is not just about regulatory compliance; it is about recognizing the evolving nature of finance. By adopting a forward-looking approach, the government can position India as a global hub for cryptocurrency innovation, attract talent and investment, and pave the way for a resilient digital economy.

Conclusion

The government’s proactive measures in previous budgets demonstrate its commitment to fostering innovation and responsible growth. Industry expectations, centred on a reduction in the TDS rate and the ability to offset losses, align with the need for a balanced and adaptive regulatory framework.
As the cryptocurrency landscape continues to evolve, a collaborative and forward-thinking approach will be essential in shaping a vibrant and sustainable future for the sector in India. The government’s measures in Budget 2024, whether it is the interim budget or the full budget, will not only shape the future of the cryptocurrency industry but will also play a crucial role in defining India’s position in the global digital economy.

The author is CEO and co-founder of Mudrex

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. They do not represent the views of Economic Times)

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(Disclaimer: The opinions expressed in this column are those of the author. The facts and opinions expressed herein do not reflect the views of www.economictimes.com.)

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