Budget 2024: Crypto industry’s wait for lower tax rates continues

Cryptocurrency industry players continue to nurture the hope of an announcement slashing of crypto taxes in the final Budget, albeit interim Budget has turned out to be non-event for them with no mention of the industry whatsoever.

Some spokespersons assert that the VDA (virtual and digital assets) industry was hoping for tax and TDS relief, but the hopes have not been dashed, albeit pushed for a later date.

They, meanwhile, root for the Prime Minister’s thrust on research or anusandhan. Their two key demands of reduction in TDS to 0.01 percent and permitting offsetting of losses continue to stand, industry players say.

Dilip Chenoy, Chairman, Bharat Web3 Association, says “Considering that this was a Vote-on-account budget, we weren’t expecting any big movement during the session. We are eagerly anticipating changes to be announced post elections when the full budget is announced.”

Hope persists

One industry spokesperson asserts that the VDA industry had hoped for tax relief while it plays a vital role in facilitating decentralised storage.

“While the VDA industry had hoped for tax and TDS relief, we remain optimistic that the full budget will bring positive developments, including reduced taxation and a supportive policy framework. The VDA industry, rooted in digitization, innovation, and research, plays a pivotal role in facilitating decentralised storage, fractional ownership, metaverse development, interoperability, scalability, and sustainability,” says Sumit Gupta, Co-founder, CoinDCX.

Rajagopal Menon, VP, WazirX says, “We believe crypto and VDAs can be a force multiplier in achieving Viksit Bharat by empowering individuals at the grassroots level. Digital public infrastructure and the PM’s aspiration for ‘Anusandhan’ will benefit from integrating provisions for long term financing of domestic crypto projects given how India is at a pivotal phase in the Crypto revolution. We expect these developments to factor in the government’s agenda along with our existing requests for a reduction in TDS rates to 0.01% and offset of losses for traders.”

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“The Interim Budget had limitations that prevented the necessary tax adjustments for the sector. On a positive note, the Government of India now has the chance to introduce comprehensive crypto regulations and improved tax policies in the upcoming full Budget. We continue to urge the government to allow offsetting and carrying forward losses, reduce the TDS on VDAs, from 1% to 0.01% and treat income from VDAs on par with other capital assets,” says Ashish Singhal, Co-founder and Group CEO, PeepalCo.

Focus on innovation

Spokespersons laud the announcement of 1 lakh crore corpus as long-term loans to encourage innovation in sunrise sectors

“In this interim budget, Finance Minister Nirmala Sitharaman outlines a strategic blueprint for continuous economic advancement, resonating with India’s ambition to achieve developed nation status by 2047. With a strong focus on fostering innovation and embracing digital transformation, it charts a path towards inclusive growth,” says Sumit Gupta of CoinDCX.

“At a broader level, the Budget is a statement of intent. The corpus of 1 lakh crore long-term loans to encourage innovation in sunrise sectors and the renewed commitment to develop deep technologies will be the GDP multipliers for the coming decade,” adds Singhal of PeepalCo.

Here’s your comprehensive 3-minute summary of all the things Finance Minister Nirmala Sitharaman said in her Budget speech: Click to download!

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