Winning Bizness Desk
Mumbai.As the Union Budget 2025 nears, the cryptocurrency industry in India is hopeful for progressive reforms. India, one of the global leaders in crypto adoption, has been grappling with challenges posed by stringent tax policies introduced in the 2022 budget. These include a 1% TDS (Tax Deducted at Source) on all crypto transactions and a ban on offsetting losses against profits.
Challenges with Current Tax Policies
The strict tax framework has pushed many investors to foreign exchanges, making it harder for the government to track transactions. Industry experts believe that revising the current tax policies is essential to curb this trend and regain investor confidence.
Key Demands of Crypto Stakeholders
Crypto leaders and investors are urging the government to introduce the following changes:
- Reduce TDS from 1% to 0.01%
- Lower the 30% tax on Virtual Digital Assets (VDAs)
- Allow investors to offset losses against profits
Avinash Shekhar, Co-founder and CEO of Pi42, emphasized, “Reducing TDS to 0.01%, lowering the 30% tax, and enabling loss offset provisions are crucial to revive the crypto industry. These steps will build investor trust and rejuvenate the market.”
Global Perspective on Crypto Taxation
The crypto market witnessed remarkable growth in 2024, with Bitcoin crossing the $100,000 mark and a surge in institutional investments. Experts suggest that India should align its crypto policies with global standards to leverage this momentum. Vishal Sachendran, Markets Head at Binance, stated, “India should adopt a simple and progressive tax policy in line with global frameworks. This will attract more investors and enhance market liquidity.”
The Need for Progressive Reforms
A balanced regulatory framework can promote transparency and investor protection. Raj Karkra, COO of ZebPay, highlighted, “Recognizing crypto as a formal asset class and providing clear guidelines for its classification will significantly benefit the industry.”
Looking Ahead to Budget 2025
The Union Budget 2025 presents a critical opportunity for the Indian government to introduce reforms that could boost the crypto industry. Progressive changes in taxation policies can position India as a global leader in the digital economy while fostering growth and innovation in the crypto space.
