India is poised to maintain its contentious tax-deducted-at-source (TDS) policy on cryptocurrency transactions, according to experts, as Finance Minister Nirmala Sitharaman prepares to unveil the 2024-2025 budget on Tuesday.&nbsp; 
This budget marks a significant moment as it’s the first since Prime Minister Narendra Modi secured a third consecutive term, albeit with a twist—his Bhartiya Janata Party (BJP) failed to achieve a majority, necessitating a coalition government. This new political landscape may influence budgetary decisions, especially with alliance partners demanding over $15 billion in the coming years. 
For the burgeoning crypto industry, the 1% TDS on crypto transactions remains a pressing issue. The Bharat Web3 Association (BWA) has persistently advocated for reducing this tax to 0.01% since its inception two years ago.&nbsp; 
The BWA’s efforts include presenting compelling data from various sources, including a think tank study, arguing that a lower TDS would keep more transactions onshore and boost government revenue. 
“I don’t foresee the 1% TDS being reduced in the near term, despite it being necessary,” said Punit Agarwal, founder of the crypto taxation platform KoinX. “The current rate leads to capital flight to international exchanges and DEXs, ultimately causing a loss to the government.” 
<div class="wp-block-image"> 
 <figure class="aligncenter">
 <img decoding="async" src="https://lh7-us.googleusercontent.com/docsz/AD_4nXenbpPj9Vcthf_NPcdnkv5WlkqoHJ2wanTfxlE-GkM6ynE30a_u7lyGTiO0FBO0xIVgvrl9r6zkl_pYKSoVBsXNs3SD9RYOPyy0H4bAXSHdPthJPFan2oRixUTijroht33FbkAd1S8msoRJAo59khyJTgI?key=95Ko9k8IA0xEfqjr1ABZHA" alt="AD 4nXenbpPj9Vcthf NPcdnkv5WlkqoHJ2wanTfxlE">
 <figcaption class="wp-element-caption">
 <a href="https://x.com/BWA_Ind/status/1808786014527275368" target="_blank" rel="noreferrer noopener nofollow">Image Source: X</a>
 </figcaption>
 </figure>
</div> 
In addition to TDS reduction, the crypto industry is pushing for progressive taxes on gains instead of the flat 30% rate and allowing losses to offset gains. There are also calls for a multi-agency regulatory framework to better manage the sector. 
The recent election results, coupled with last week’s <a href="https://www.cryptotimes.io/2024/07/18/half-of-investors-funds-gone-from-wazirx-in-massive-breach/" target="_blank" rel="noreferrer noopener">$234.9 million hack</a> of the crypto exchange WazirX, may have shifted cryptocurrency further down the list of government priorities. The scale of this hack has left the crypto community in shock. In response, both the community and the government may focus more on regulatory compliance to enhance security. 
However, BWA officials remain optimistic that at least one of their three main requests will be addressed. The association’s hope is buoyed by the fact that it was included in pre-budget consultations with the Finance Ministry, a first since 2022.&nbsp; 
“High TDS may have driven retail investors to offshore exchanges, but the government’s focus on stringent regulation suggests that rate reduction is unlikely,” said Rajat Mittal, a Supreme Court crypto tax counsel. “The need for robust oversight in the digital asset space is viewed as more critical than alleviating industry concerns.” 
Despite the lack of direct assurances from the Finance Ministry, the crypto community is hopeful that the discussions will pave the way for more favorable policies. With draft legislation on comprehensive crypto regulation expected to be submitted to parliament, there is cautious optimism for a more balanced approach to the digital asset sector. 
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> 
 Also Read: <a href="https://www.cryptotimes.io/2024/07/22/india-budget-what-can-crypto-community-expect/" target="_blank" rel="noreferrer noopener">India Budget 2024-25: What can Crypto Community expect?</a> 
</blockquote>

India’s Budget Likely to Maintain Current Crypto Tax Rates

The Crypto Times

Other articles published on Jul 22, 2024

Japan Seeks Major Tax Reform for Crypto-Assets: A Leap Towards Financial Innovation

Worldcoin Rockets 90%: Can It Sustain Momentum or Will Resistance Hold?

Beta Finance Simplifies Crypto Borrowing

Shiba Inu Sees Increased Burn Rate

SSV Network DAO Launches Two New Projects to Boost Community Engagement

After Binance, OKX Also Hints to List $GRASS

Join our free newsletter for daily crypto updates!