Impact

Status

The release of India’s Union Budget for 2024-25 has left a significant portion of the country’s population pondering its implications, particularly the cryptocurrency community, which finds itself at a standstill. 
On July 23, the budget brought up by Finance Minister Nirmala Sitharaman left the digital currency industry <a href="https://www.reuters.com/world/india/india-unveils-plans-spend-jobs-middle-class-first-post-poll-budget-2024-07-23/" target="_blank" rel="noopener nofollow">unaddressed</a> even after prior speculations and anticipation of potential regulatory clarifications or supportive measures. 
This omission comes at a time when the global digital currency industry is seeing various levels of adoption and regulation, highlighting a stark contrast in <a href="https://bitcoinist.com/crypto-exchange-seeks-indian-approval-as-users-hit-roadblock/" target="_blank" rel="noopener ">India’s approach</a> to handling these digital assets. 
<h2 id="2022-tax-status-quo-continues-community-reactions">2022 Tax Status Quo Continues: Community Reactions</h2> 
The budget outlined nine priorities for economic growth, such as agriculture and employment, but not virtual currencies. This absence is regarded as a failure to create an innovation-generating and investment-attracting legal framework in the rapidly developing field. 
Apart from this, while there were important modifications proposed in the budget, like doing away with angel tax for startups and a tweak to the equalization levy, none of these changes were reflected in the case of digital currency assets, leaving the existing digital currency tax<a href="https://bitcoinist.com/south-korea-could-delay-crypto-taxation-until-2028-due-to-investors-concerns/" target="_blank" rel="noopener ">&nbsp;framework</a> unchanged. 
The absence of anything on the budget for digital currency has left the Indian digital currency community feeling shocked and worried. High-profile individuals such as developer Vijay Saran have recently taken to X to voice their concerns about the plan, which does not even mention <a href="https://bitcoinist.com/malaysia-tightens-noose-crypto-taxation-nationwide/" target="_blank" rel="noopener ">digital currency</a>. 
<blockquote class="twitter-tweet"> 
 Union Budget 2024 Update: 
 There is not even a single mention of Crypto in the <a href="https://twitter.com/hashtag/unionbudget2024?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener nofollow">#unionbudget2024</a> 
 The Indian government did not mention anything related to cryptocurrencies in the union budget 2024-25 which means Tax on Crypto transactions and TDS is unchanged: 30% TAX and 1% TDS… <a href="https://t.co/raBT1xWA6M" target="_blank" rel="noopener nofollow">pic.twitter.com/raBT1xWA6M</a> 
 — Vijay Saran (@imvijaysaran) <a href="https://twitter.com/imvijaysaran/status/1815656998622429686?ref_src=twsrc%5Etfw" target="_blank" rel="noopener nofollow">July 23, 2024</a>
</blockquote> 
According to Saran, the digital currency market left unaddressed in the budget suggests that the status quo from 2022 will continue, whereby <a href="https://bitcoinist.com/democrats-poised-to-win-back-crypto-voters/" target="_blank" rel="noopener ">crypto transactions</a> are taxed at 30% with an additional 1% tax deducted at source (TDS). 
Notably, these tax measures are among the strictest globally, significantly impacting the operational dynamics of digital currency exchanges and investors within the country. 
<blockquote class="twitter-tweet"> 
 Another budget session for India, and still NO mention of <a href="https://twitter.com/hashtag/Crypto?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener nofollow">#Crypto</a>. We need reduced crypto tax to encourage adoption of cryptocurrencies in India. <a href="https://twitter.com/hashtag/CryptoIndia?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener nofollow">#CryptoIndia</a> 
 — Shubham Datta (@shubhamdat429) <a href="https://twitter.com/shubhamdat429/status/1815733631895195861?ref_src=twsrc%5Etfw" target="_blank" rel="noopener nofollow">July 23, 2024</a>
</blockquote> 
<h2 id="impact-of-india-s-crypto-tax">Impact of India’s Crypto Tax</h2> 
The stringent tax regime has already had a chilling effect on the digital currency market in <a href="https://bitcoinist.com/shiba-inu-competitor-floki/" target="_blank" rel="noopener ">India</a>. According to the National Academy of Legal Studies and Research (NASLAR), since the implementation of these taxes, trading volumes on Indian exchanges have plummeted by 97%, and active user participation is down by 81%. 
<img loading="lazy" decoding="async" class="wp-image-311632 size-large" src="https://bitcoinist.com/wp-content/uploads/2024/07/Screenshot-2024-07-23-at-14.13.13.png?resize=980%2C627" alt="Trade Volume of Top 6 Indian Exchanges" width="980" height="627" srcset="https://bitcoinist.com/wp-content/uploads/2024/07/Screenshot-2024-07-23-at-14.13.13.png?w=1809 1809w, https://bitcoinist.com/wp-content/uploads/2024/07/Screenshot-2024-07-23-at-14.13.13.png?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/07/Screenshot-2024-07-23-at-14.13.13.png?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/07/Screenshot-2024-07-23-at-14.13.13.png?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/07/Screenshot-2024-07-23-at-14.13.13.png?w=1536 1536w, https://bitcoinist.com/wp-content/uploads/2024/07/Screenshot-2024-07-23-at-14.13.13.png?w=750 750w, https://bitcoinist.com/wp-content/uploads/2024/07/Screenshot-2024-07-23-at-14.13.13.png?w=1140 1140w" sizes="(max-width: 980px) 100vw, 980px" data-recalc-dims="1"> 
NASLAR <a href="https://media.licdn.com/dms/document/media/D4D1FAQEMFIUw79-EqA/feedshare-document-pdf-analyzed/0/1718873824219?e=1721865600&amp;v=beta&amp;t=ccnxKWKBze-XiWlKrxYFDL9IaQWXTeo1x0wwXdMdYF0" target="_blank" rel="noopener nofollow">found</a> that these slumps damage the digital currency space and result in significant losses to the national treasury, estimated at 59 billion Indian rupees ($700 million) annually. 
In contrast, a study published by NASLAR suggests that capping crypto TDS to 0.01% would see the government collect twice as much from the industry. 
<img loading="lazy" decoding="async" class="size-medium" src="https://www.tradingview.com/x/1wMcRqZ6/" alt="Crypto TOTAL Market Cap on TradingView" width="2770" height="1496"> 
Featured image created with DALL-E, Chart from TradingView

India Government Ignores Crypto: No Mention in Union Budget 2024-25

Съдържание

Bitcoinist

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