February 6, 2024
By Anjali Kochar
While India continues to work together with G20 to create a single globally regulatory framework, the country’s Finance Minister Nirmala Sitharaman has not updated any information about crypto taxes or regulations during February 1 Interim Budget speech.
The government has taken several measures to meet the demands of the Indian crypto industry, including sending show-cause notices to offshore crypto exchanges like Binance and Kucoin for not complying with local anti-money laundering laws and not getting registered in the country. This led to Indian retail crypto investors opting for offshore exchanges to evade the 30% virtual digital asset (VDA) tax and the 1% TDS charged on every crypto transaction of over Rs 10,000.
The industry body Bharat Web 3 Association (BWA) has asked for regulatory tightening of offshore exchanges and reiterated its demand for rationalizing taxes. India has not introduced any changes to its controversial tax deducted at source (TDS) policy that is affecting the crypto industry. The crypto industry has urged the government to reduce the 1% TDS to 0.01% since it was first announced two years ago, and Indian crypto exchanges have been in survival mode, trying to extend their runways in response to the 1% TDS.
India’s taxes by the government have prompted up to five million crypto traders to move their transactions offshore, costing the government a potential $420 million in revenue since it was introduced in July 2022. Rajagopal Menon, vice president of cryptocurrency exchange WazirX, expects these developments to factor into the government’s agenda along with existing requests to reduce TDS rates to 0.01% and offset losses for traders.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.