Union Budget 2023-24 expectations: Crypto sector hopes for tax deduction

The Union Budget 2023-24 will be tabled by Finance Minister Nirmala Sitharaman in the Indian Parliament at 11am today. Like various other sectors, the crypto market is also expecting some positive announcements for its growth in India in the upcoming fiscal year. From tax regimes that can support demand for cryptos to a regulatory framework for cryptos in India, there is much reason for the crypto industry to hope for Narendra Modi’s government’s last full budget ahead of the 2024 general election.

In the Union Budget last year, the FM took some tough calls for the crypto sector, introducing a 30 percent profit tax and a 1 percent withholding tax (TDS) for everyone crypto transactions. The government’s decision to include virtual assets (like cryptocurrency) in the tax regime was seen as an indirect way to bring crypto transactions into the legal ecosystem. However, it has been a year and the crypto transactions are still waiting to be legal.

According to the 2022-23 Economic Survey report released on Jan. 31, it looks like the government won’t give a prominent thought to legalizing crypto transactions. Quote The FTX collapse, the government has highlighted how the crypto market has proven riddled with vulnerabilities. RBI Gov. Shakktanta Das had previously cleared that the “RBI wants to stick to its stance of banning them outright.”

One of the main demands of the sector will be a tax cut on crypto transactions. According to a CoinDesk reportindustry experts expect a reduction in TDS to at least 0.1 percent from the current 1 percent.

Another major announcement to look forward to is India’s mention of working on its digital currency or CBDC. Previously an RBI official specified that the transactions with CBDC remain anonymous to a certain extent and only take place between banks in India.