Nirmala Sitharaman, India’s finance minister, neglected to mention the topic of cryptocurrencies when she read the Union Budget for the fiscal year 2023-2024 on Wednesday, February 1. hopes for crypto activities will be clearer from this year’s Union Budget announcement. However, industry insiders have predicted that the government may remain tight-lipped about this next-generation fintech sector amid a variety of reasons.
India tax 30% Tax on all profits generated from cryptocurrency trading and other related activities last year. In addition, a percentage of TDS has also been levied on each crypto transaction so that the government can manage to maintain a trace on these largely anonymous payments.
Less than a year has passed since these tax laws went into effect for the crypto sector in India which is why there are no amendments to the current regime or new rules around the crypto sector. This area is published today. This opinion was shared with Gadgets 360 by Sathvik Vishwanath, Co-Founder and CEO of crypto exchange Unocoin.
“Government needs to have enough data over a long period of time, such as a fiscal year or two, to analyze and revise as needed. Therefore, no major news is expected about the crypto industry,” Vishwakarma said.
The Unocoin honcho also revealed that his company shared interim data with the Indian government on the nature and number of transactions when the tax system was in place.
Over the past year, Indian crypto traders as well as industry players have urge Ministry of Finance to consider reducing the imposed tax.
In December last year, the industry body of India Website3 has called the crypto tax ‘unfriendly’ which is hindering the growth of the industry.
Despite the constant repetition, this outcry from the crypto space has not tampered with the finance ministry’s skeptical approach to the sector.
Today, FM Sitharaman’s tight-lipped stance on the crypto industry has disappointed players quite a bit.
Talking to Gadgets 360, Rajagopal Menon, Vice President at WazirX . Cryptocurrency Exchangesays the government must review the tax law and grant some relief to the industry soon.
“There is lingering uncertainty because of high taxes and the lack of a solid economy. Legal framework are holding back progress in the industry. For now, the trading volume on Indian exchanges is likely to remain at the lowest level. We hope that the government will reconsider its stance on crypto taxation and work with the industry to create a regulatory framework that supports and encourages growth,” Menon noted.
On social media, it seems that many people breathed a sigh of relief as FM Sitharaman did not say anything negative or alarming towards the crypto industry.
Afterward RBI’s Wrath towards enabling the diffusion of crypto culture, FM Sitharaman’s avoidance of the topic seems to have given rise to a ‘no news is good news’ sentiment among crypto enthusiasts.
Real. Either way, the “ban” is now out of the equation as they seek a global regulatory framework for cryptocurrencies through the G20. By this time next year, I believe we could see some progress there.
— Mohith | Actual protocol (@MohithAgadi) February 1, 2023
Meanwhile, there are plenty of announcements that could help the crypto industry thrive in the long run after India finalizes its regulatory framework.
For instance, FM Sitharaman said India is thriving on a technology-based economy.
The country is also accelerating its efforts to adopt and promote clean energy production and use, which could enhance India’s position in the energy-intensive cryptocurrency mining business. .
Experts from the crypto industry have acknowledged the focus that India is placing on the overall digital transformation of the nation’s financial sector.
“The drive to improve financial literacy and build DigiLocker as a one-stop KYC solution are positives for the rich tech ecosystem. Using it has helped us a lot at CoinSwitch to implement more user-friendly KYC standards,” Ashish Singhal, CEO and Co-Founder of CoinSwitch, told Gadgets 360.
Sitharaman also did not mention any developments surrounding the launch CBDC . Indian Digital Rupee currently being tested in major cities under the supervision of RBI.