Crypto Startups Disappointed by Budget 2024's

Crypto startups have voiced disappointment with Budget 2024. It failed to address the pressing issue of tax rate cuts on virtual digital assets (VDAs). Union Finance Minister Nirmala Sitharaman made no announcements regarding changes to crypto taxation. This has left the industry feeling overlooked. Why did the government miss this chance to support the burgeoning crypto sector?

"We had hoped the government would reduce taxation. Align it with other asset classes. Unfortunately, this has not been addressed, representing a missed opportunity" stated Vikas Singh, Co-Founder of NFTFN. His sentiments reflect broader frustration within the crypto community. They see equitable tax policies as essential for growth and investment.

Currently, crypto investors in India face stringent tax rules. There is a 1% tax-deducted-at-source (TDS) on every crypto transaction. Profits from cryptocurrency trading or asset transfers are taxed at a steep 30%. Moreover, other income such as salary or business income cannot offset crypto losses. Nor can they be carried forward to subsequent years. Only the cost of acquisition is deductible. These regulations are seen as significant barriers to the industry's development.

Sumit Gupta is the Co-founder of CoinDCX. He highlighted ongoing efforts to advocate for a more favorable tax framework. "For investors, we had anticipated some relaxation to the taxation framework in this budget. We will continue to push for rationalizing the taxation framework. This includes reducing TDS to 0.01%. It also involves allowing the setoff of losses on VDA transactions. Moreover, it involves modifying the 30% tax on capital gains. We have submitted data-backed analyses on the flight of capital and users" he explained.

The crypto industry remains hopeful that future budgets will address these concerns. This could foster an environment that encourages innovation and investment. Will the government eventually recognize the potential of the crypto sector? Adjust its policies accordingly?

Budget 2024 disappointed crypto startups by not addressing tax concerns. This is seen as a missed opportunity to support growth and investment. With a 1% TDS and 30% tax on gains, industry leaders continue to push for a more favorable tax framework.