India’s Finance Minister, Nirmala Sitharaman, said that the country will not change its tax rules on cryptocurrencies for the fiscal year 2024–25. This is despite calls for change from leaders in the business.
If you buy coins, Sitharaman said that the 1% tax taken at source (TDS) rate will not change, just like she did in her last budget speech. This rate stayed the same in the short-term budget that was given in February 2024. It began in April 2022. A lot of people don’t agree with the 1% TDS rate. This has caused a significant decrease in deals and made people worry about how it will affect the market.
Crypto Tax Rate Unchanged
A lot of people in the business world have said that things need to change. The crypto business wants to lower the TDS rate from 1% to 0.01% and change how gains are taxed so that the rate rises over time. Some people have also said that to make taxes more fair, losses should be able to be taken out by gains.
Even with these requests, Sitharaman’s budget address made it clear that the 1% TDS rate will stay in place. The 30% flat tax rate on gains from crypto assets will also stay in place. This rate applies to both trading and investing. The government’s choice shows that they are being careful with the changing cryptocurrency market.
India’s most significant bitcoin exchange, WazirX, is run by Nischal Shetty. He thought that the current tax system would stay in place. With the most recent budget, what he said came true. Sumit Gupta, founder and CEO of CoinDCX, also talked about the issue in an interview with. If the high TDS rate stays in place, buyers will still have to pay high taxes, which is not good. This could help the local crypto industry, which has more than 1,000 startups.
“For investors, we had anticipated some relaxation to the taxation framework in this budget. We will continue to push for rationalization of the taxation framework which includes reducing the TDS to 0.01%, allowing setoff of losses on VDA transactions and modifying the 30% tax on capital gains.”
He said that the high tax rate has made it harder to get money and has led investors to look for places in other countries. They got rid of taxes on investors, which made him happy. He thinks this will help the Indian crypto business grow. He was upset, though, that the TDS rate didn’t change.
