India’s Finance Minister, Nirmala Sitharaman, will present the budget for 2024–2025 on February 1, 2024. This is the last budget session before the nation delves into the Lok Sabha elections. The Web3 community of the country, for one, has come forward with its demands. The community seeks tax relief for crypto-related activities.
That entails a reduction in TDS from 1% to 0.01%, the ability to carry forward losses, and flexible tax slabs. Therefore, the Web3 community has started a trend along with #ReduceCryptoTax. According to the community, their demands have been on the table for the last two years, but the government has not paid any attention to them. In contrast to that, the government has said that they are drafting new rules and regulations that would work to safeguard the industry from exploitation while also keeping inventors safe.
Nevertheless, the priority of India’s Web3 community is stuck on getting their demands met. There are no hints from Sitharaman or representatives of her department. Only on February 1, 2024, will the community come to terms with the relevant facts.
The hashtag is not precisely gaining momentum. This is evident from the fact that more of the posts on X had less than 10,000 views at the time of writing this article. For instance, Dr. Sathvik Vishwanath, the Chief Executive Officer of Unocoin, only received 2,343 views on a post. He had published his post on January 27, 2024, at 8:47 a.m. IST.
Other crypto enthusiasts, Crypto with Khan and Trading Career, have around 7,344 and 836 views, respectively, with posts originally published on January 24, 2024, and January 21, 2024, in the same order. They do have similar patterns of publishing posters and using the hashtag.
Sathvik is vocal about the demands. He has said that policymakers and regulators must make sure that there is a time-to-time balance between taxation, innovation, and future global prospects, adding that the community has already been under immense pressure for 724 days with taxation.
TDS on crypto transactions covers all aspects: trade, purchase, and deposit. Additionally, crypto holders must pay a 30% tax on crypto gains.
India’s Web3 community has based its argument on the fact that heavy taxes are discouraging residents from participating in crypto activities. Moreover, they are saying that most of the activities are shifting to offshore platforms. More specifically speaking, the Esya Centre’s report has said that over 90% of the VDA trade volume by Indians is credited to offshore platforms. That translates to approximately ₹350,000 crores between July 2022 and July 2023.
RBI, that is, the Reserve Bank of India, has warned about the consequences of introducing activities related to crypto into the financial system of the country. It could be because of constant volatility and financial threats to investors.