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India’s Finance Minister Nirmala Sitharaman is set to unveil the 2024-2025 budget on Tuesday, and crypto industry experts are not expecting any major changes to the controversial tax-deducted-at-source (TDS) policy on crypto transactions. This budget is particularly noteworthy as it will be the first since Prime Minister Narendra Modi’s re-election for a third consecutive term. TDS policy and industry demands 
However, Modi’s Bharatiya Janata Party (BJP) fell short of a majority in the recent elections, necessitating a coalition government. This shift could influence budget allocations, with coalition partners demanding over $15 billion in funding for various projects.
For the cryptocurrency sector, the TDS policy remains a critical issue. Introduced two years ago, the TDS rate stands at 1%. The Bharat Web3 Association (BWA) has been advocating for a reduction to 0.01%, arguing that the current rate encourages capital flight to international exchanges and decentralized platforms, resulting in potential revenue losses for the government. The BWA has supported its request with data from studies, suggesting that a lower rate could keep more transactions within India and boost government revenues. Challenges and industry perspectives 
Punit Agarwal, founder of thecrypto taxation platform KoinX, doubts the TDS rate will be reduced anytime soon. He points out that the high rate drives investors to seek alternatives outside the country, undermining the potential benefits for the Indian economy. 
Other industry demands include shifting to a progressive tax system on gains rather than the existing flat 30% rate and allowing losses to offset gains. Additionally, there are calls for clearer multi-agency regulation of the sector.
Despite a recent $230 million hack of crypto exchange <a href="https://news.todayq.com/indias-fastest-growing-crypto-exchange-loses-235m-in-breach/" rel="noopener noreferrer nofollow">WazirX</a>, which might have shifted focus away from crypto issues, the BWA remains hopeful. They were invited to discuss their concerns with the Finance Ministry as part of pre-budget consultations, a positive sign compared to the previous year when they were not consulted.
Nevertheless, Rajat Mittal, a Supreme Court crypto tax counsel, believes that the government’s emphasis on stringent regulation may overshadow industry demands for tax relief. The priority appears to be on establishing robust oversight in the digital asset space rather than addressing the current tax concerns.
As the budget announcement approaches, the crypto industry waits to see if any of their requests will be addressed in the new fiscal plan.

Crypto taxation set to remain unchanged in India’s upcoming budget

Todayq News

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