The Indian government’s recent budget announcement for 2024-25 has left many people scratching their heads, especially those in the cryptocurrency community. The budget, which outlined priorities like agriculture and employment, completely ignored the topic of digital currencies. This silence is a major blow to the crypto industry, which was hoping for some clarity on regulations or even supportive measures.
Crypto Community Reacts to Budget Silence
The lack of any mention of crypto in the budget has been met with disappointment and concern. Many people believe that this inaction will stifle innovation and discourage investment in the rapidly developing crypto space.
Vijay Saran, a developer, expressed his frustration on X (formerly Twitter), stating that the budget’s silence means the existing tax regime will continue, which includes a hefty 30% tax on crypto transactions and a 1% tax deducted at source (TDS).
These taxes are among the highest in the world and have had a significant negative impact on the Indian crypto market.
The Harsh Reality of India’s Crypto Tax
The current tax regime has already taken its toll on the Indian crypto market. According to the National Academy of Legal Studies and Research (NASLAR), trading volumes on Indian exchanges have plummeted by a whopping 97% since the implementation of these taxes. The number of active users has also dropped by 81%.
NASLAR’s research suggests that these strict taxes are actually hurting the government’s own revenue. They estimate that the Indian treasury is losing around 59 billion Indian rupees ($700 million) annually due to the decline in crypto activity.
A study by NASLAR suggests that lowering the TDS rate to 0.01% could actually double the government’s revenue from the crypto industry.
The silence on crypto in the recent budget raises serious concerns about the future of the industry in India. It remains to be seen whether the government will reconsider its stance and implement more favorable policies to encourage growth and innovation in the crypto space.
