India prepares to unveil its Union Budget for 2024 on February 1. Meanwhile, the domestic cryptocurrency sector is holding its breath for a significant tax cut.

Rajagopal Menon of WazirX has expressed the community’s hopes to CoinGape, advocating for a substantial decrease in the Tax Deducted at Source (TDS).

He said, “We hope that the finance ministry would reduce in the Tax Deducted at Source (TDS) rate from 1% to 0.01%.”

BWA calls for tax reduction

The Bharat Web3 Association (BWA), representing India’s crypto and web3 sectors, echoed these sentiments last month. As reported by Moneycontrol, the association’s demands include not only the TDS rate reduction but also the inclusion of foreign exchanges under the TDS umbrella and a reassessment of the flat 30% tax rate on crypto income.

Menon added, “Additionally, the offsetting of losses against gains made should be allowed. The underlying objective is to ensure a level playing field in the cryptocurrency space, devoid of regulatory or tax arbitrage for any participant.”

India’s cryptocurrency market has been strengthened by adoption. It stands as the world’s second-largest in transaction volume, as per Chainalysis data cited by BWA. Despite this, India’s heavy tax burden has pushed over 90% of crypto exchange traffic offshore, as CoinDCX’s Sumit Gupta informed Moneycontrol.

Community outcry on X

Further tightening the rules, India has recently made it difficult to access foreign exchanges like Binance domestically. CoinGape reported that the Apple app store recently removed at least four of these offshore exchanges. The clampdown comes amidst a community outcry. They want a say in how their taxes are spent, as voiced by users on X.

The community’s frustration is palpable, with calls for reduced taxation resonating across social media platforms. Users draw comparisons with the U.S., where recent moves to launch Bitcoin ETFs contrast with India’s stringent tax regime.

The sentiment is clear: high taxes without corresponding services are unjust, a sentiment echoed by @Bot17204, who, alongside others like @CryptoMechanism and @CennoCapital, call for fewer restrictions and a more supportive tax environment for burgeoning tech investments.

As the Union Budget 2024 looms, the collective voice of the crypto community is loud and clear—India must recalibrate its tax strategy to nurture the digital asset sector, not stifle it.

Also Read: India’s Crypto Regulation at Standstill: RBI Deputy Reappointed

The post Indian Crypto Community Awaits Budget 2024 with Hopes for Tax Reforms appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am