The hashtag "#ReduceCryptoTax" is trending on social media, as Indian crypto advocates try to argue for fairer regulation of the digital asset space in India.
What Happened: In anticipation of the Interim Budget 2024-25, scheduled for presentation by India's Union Finance Minister Nirmala Sitharaman on Feb. 1,nsocial media users are urging changes to cryptocurrency tax regulations.
Despite appeals for a revision of crypto-related tax laws over the past two years, the government has not made significant adjustments.
The current tax slab of 30% is higher than that for other sources of income, salary, or capital gains.
Additionally, there is a call for a decrease in the Tax Deducted at Source (TDS) on each crypto transaction, seeking to bring it down to 0.01% from the existing 1%.
Indian stock exchanges have been cautious about offering crypto brokerage services due to the perceived risks associated with the nascent nature of the crypto sector.
See Also: Apple Axes Binance, Other Global Crypto Exchanges From India App Store Amid Legal Heat
Why It Matters: Behavioral Finance and Capital Markets expert Siddartha Rastogi shared with Benzinga his opinion on the approach to crypto tax in the Interim Budget.
“Nothing is going to change,” due to concerns about the black money movement in crypto, he stated. Loosening tax policies could lead to illegal money entering the country, affecting development.
From investors’ perspective, tax rates impact participation and liquidity, but the government aims to enhance compliance before adjusting rates. As an interim budget - for 3 months - major changes are unlikely.
Katalyst Advisors, Executive Director Binoy Parikh, said, “Since this would be an interim budget, very limited changes are expected on the tax front.” He sees the rationalizing of withholding tax provisions will lead to higher volumes in the crypto space. He adds that with the volatile crypto market, “set off of losses on crypto losses should be permitted to be set off against other incomes and be permitted to be carried forward.”
Crypto Community Voicing Opinions: The CEO and Co-Founder of Unocoin, Dr. Sathvik Vishwanath, stated in a recent X post, “Unfair taxation is not only setting our #crypto industry behind but also increasing the time needed to fix deficiencies & compete with global landscape. Amending our taxation laws helps us reach heights sooner!”
In another tweet, he adds how these unfair crypto taxations in India are driving many to consider moving out of the country thereby causing loss of taxes, employment, and investment in India.
A crypto influencer, SmartViewAi YouTuber Pushpendra Singh ,took to his X handle to state that India has the world's worst crypto taxation ever with 1% in tax deducted service, 30% in tax, no loss set off, and no banking support.
Another Indian trader tweeted a video highlighting how Indian exchanges do not have many of the trending and pumped-up coins available for trade. He also points out that due to the high trading fees and taxes, traders can earn no profit in trading crypto on the Indian exchanges.
He is requesting maximum retweets so that “ReduceCryptoTax” reaches the Indian government.
In his latest X post, crypto influencer Keyur Rohit outlined crypto's role in India’s 2024 budget and what the crypto sector expects. He adds why this could revolutionize the game if there is a well-defined legal framework and the regularization of the tax structure in the upcoming budget.
He advocates the removal of the 1% TDS and proposals to allow users to offset losses related to digital assets.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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