Prior to the official unveiling of the union budget for 2024, the cryptocurrency sector as a whole anticipates a reduction in the tax rate on virtual digital assets (VDAs). Furthermore, there are plans to establish a self-regulatory organization to oversee the crypto and blockchain industry and develop sandboxes to support enterprises’ expansion.
At present, Indian cryptocurrency exchanges are experiencing trading volume losses; since the implementation of taxes, cryptocurrency users have relocated to more lucrative markets. The recent measure implemented by the finance ministry to issue show cause notices to offshore exchanges and suspend URLS has granted Indian exchanges a degree of leeway in this particular situation.
Ashish Singhal, co-founder and group CEO of PeepalCo, states that CoinSwitch, a cryptocurrency platform, is urging the government to reduce the TDS on VDAs from the current 1% to 0.01% to facilitate the recovery of losses incurred from the sale of VDAs and to classify income tax from VDAs in the same manner as other capital assets.
Furthermore, in accordance with Section 194S of the TDS, the Bharat Web3 Association (BWA) has requested that the government reassess the 30% rate established for income generated from the transfer of VDAs, including offshore exchanges.
Likewise, the sector seeks a standardized regulatory framework. Sumit Gupta, the chief executive officer of CoinDCX, asserts that the establishment of a robust self-regulatory framework for cryptocurrencies and blockchain technology could prove to be an innovative stride toward implementing a standardized regulatory structure in these domains.
BuyUcoin CEO Shivam Thakral compares India to uncharted territory in which blockchain technology will flourish regarding fostering startup activity in this sector. Tax incentives and sandboxes are critical elements in fostering the growth and development of enterprises.
Nischal Shetty, co-founder of Shardeum, concludes that the industry would benefit from the ministry’s decision to allocate funds to indigenous projects that represent innovation and real-time utility.
