Crypto Experts Push for Reduced TDS and Clearer Regulations in Budget 2024
The crypto industry in India is optimistic about the changes expected in Budget 2024 that will promote growth and innovation. Industry experts are looking for a regulatory and tax environment that better supports the growing digital economy.
The current framework, implemented over two years ago in the February 2022 Budget, has unintentionally led to transactions moving to offshore platforms, making tracking and tracing more challenging.
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Ashish Singhal, Co-founder of CoinSwitch, emphasized the importance of a regulatory and tax environment that is conducive to growth.
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Singhal stated, “We urge for a regulatory and tax environment that supports the growing digital economy and encourages innovation. The current tax framework for Virtual Digital Assets (VDAs) is causing unintended consequences by shifting transactions to offshore platforms, which hinders tracking and tracing.”
Singhal believes that reviewing the tax treatment on VDAs in the July 2024 Union Budget is necessary.
He proposed reducing the TDS rate on VDA transfers from 1% to 0.01% under Section 194S to bring more transactions into the tax oversight mechanism, improve tax compliance, and prevent capital flight.
“Allow loss offsets like other sectors to promote responsible trading practices and reduce tax evasion risks. The flat 30% tax rate on income from VDA transfers should be reevaluated for consistency with other tech-enabled sectors,” Singhal added.
Raj Karkara, COO of ZebPay, echoed similar sentiments, emphasizing the significance of 2024 for the crypto industry.
He said, “2024 is shaping up to be a significant year for the crypto industry with developments like the approval of Spot Bitcoin ETFs and Ethereum ETFs in the US, along with the recent ‘Bitcoin Halving’ event. The industry is anticipating SEBI’s approach to regulating the crypto sector with multiple regulators. These developments show the growing acceptance of crypto as an asset class.”
Karkara stressed the importance of regulatory clarity to establish a secure and transparent investment ecosystem.
“Regulatory clarity is crucial for creating a secure and transparent investment ecosystem for all stakeholders,” he mentioned.
He expressed optimism that Budget 2024 would propose a collaborative approach between the government and the Web3 industry.
Building on positive developments at the G20 summit, he believes a comprehensive regulatory framework is essential, along with reducing TDS and Capital Gains Taxes to foster inclusivity and active investor participation.
Clear regulations, according to Karkara, will drive innovation and allow the industry to unlock the full potential of blockchain technology, leading to transformative changes and financial independence in the country.
Published On:
Jul 16, 2024
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