The India crypto community remained largely disappointed with the recently announced union budget 2024-25 as the finance minister Nirmala Sitharaman made no mention of crypto or virtual digital assets in her one-and-a-half-hour-long speech on Tuesday.
With no changes announced for crypto in the budget, India has retained its contentious tax slab of 30% tax against earnings and 1% Tax Deducted at Source (TDS) over the transactions made by crypto assets.
While market analysts were expecting no changes in the crypto tax slab, the crypto community was largely disappointed as Sitharaman chose to completely avoid the topic.
“Yes, the whole crypto community is disappointed. For crypto investors, we had anticipated some relaxation in the taxation framework in this budget. The current tax structure imposes significant burdens on investors and hampers the growth of the industry. We had hoped for more favorable conditions that would encourage investment and innovation. Specifically, we will continue to push for the rationalization of the taxation framework, which includes reducing the TDS (Tax Deducted at Source) to 0.01%, allowing the setoff of losses on Virtual Digital Asset (VDA) transactions, and modifying the 30% tax on capital gains,” said Ajay Kashyap, an India based crypto influencer.
“As Indians, we pay up to 30% income tax and 30% crypto tax. On top of that, there’s up to 28% GST, along with stamp duty, property tax, road tax, and tolls. The government keeps squeezing the middle class and taxpayers without providing significant benefits,” said Pushpendra Singh, CEO of SmartViewAI, on X.
Another Crypto Influencer Budhil Vyas took to X to vent his disappointment over the budget announcement.
“No mention of Crypto only! Let’s hope together we can push the government and educate them more about the Industry. Crypto is not only about trading. It employs people, generates value, brings $ into the country. As a community, we stand strong on our demands for fair tax,” said Sonu Jain, a Chartered Accountant and Crypto Tax Expert, on X.
Ishita Pandey, a Web3 marketer, expressed disappointment over Finance Minister Nirmala Sitharaman’s failure to mention crypto or virtual digital assets in her budget speech.
“It’s quite surprising and a bit disappointing that Finance Minister did not mention crypto or virtual digital assets in her speech. The crypto community has been eagerly waiting for some positive news or at least some clarity regarding regulations and tax structures. Keeping the crypto tax slab unchanged feels like a missed opportunity to foster innovation and adoption in this rapidly growing sector.,” said Pandey, while speaking to The Crypto Times.
Meanwhile, a few industry leaders chose to look at the positive aspects of the budget especially the abolishing of the “angel tax.”
CoinDCX Co-founder Sumit Gupta expressed enthusiastic approval for the Finance Minister’s budget announcement that abolishes the Angel tax for all classes of investors. Gupta believes this move will significantly strengthen India’s tech start-up ecosystem, particularly within the Web3 sector.
He highlighted, “India stands at the forefront of the global Web3 ecosystem with a network of over 1,000 startups spanning diverse sectors. Collectively, these Indian Web3 startups have secured funding exceeding $2.5 billion, reflecting the landscape’s robust growth and investment potential.”
Notably, in 2023 alone, Indian Web3 projects attracted around $270 million in funding, underscoring strong investor interest in early-stage Web3 innovation.
Gupta emphasized that as Web3 technology becomes more mainstream, investments in this sector are expected to rise. The removal of the Angel tax will undoubtedly benefit Indian founders, particularly those spearheading early-stage Web3 companies.
However, Gupta noted that investors had anticipated further relaxation in the taxation framework in this budget. He called for a rationalization of the taxation structure, advocating for the reduction of TDS to 0.01%, the allowance for the setoff of losses on VDA transactions, and modifications to the 30% tax on capital gains.
CoinDCX has submitted data-backed quantitative analyses demonstrating the flight of capital and users, and the potential increase in government revenue if the taxation structure is revised.
