India’s Crypto Sector Pushes for Tax Cuts as U.S. Pro-Crypto Shift Spurs Government Talks
- India’s crypto industry seeks to reduce the 30% capital gains tax and 1% TDS to encourage domestic growth.
- Government and RBI show increased engagement and softer stance, yet public misconceptions and regulatory delays persist.
India’s cryptocurrency sector is actively advocating for tax changes as officials in New Delhi engage with the industry. The change in policy follows a renewed pro-crypto position from the United States after Donald Trump’s return to the White House.
According to a report by Financial Times, since 2022, India has applied a 30% capital gains tax on crypto profits and a 1% tax deducted at source (TDS) on every crypto transaction. These measures aimed to prevent illegal activities and improve identification but have pushed over 90% of Indian crypto trading offshore, according to the Esya Centre, a New Delhi think tank.
Industry leaders now report more regular discussions with government officials. Ashish Singhal, co-founder of CoinSwitch, stated that policy meetings have shifted from every six months to nearly weekly sessions. The current tax policy has drawn objections for limiting domestic crypto activity. Industry executives propose reducing the transaction tax to 0.1%, which they argue would maintain traceability while encouraging growth.
The request comes from worries that taxes deter people from investing and trading in the country. The crypto industry in India is predicted to see growth from $2.5 billion in 2024 to over $15 billion in 2035, Grant Thornton says. Now that Coinbase and Binance are working in India, the market shows renewed faith.
Earlier this year, the RBI which at one time opposed crypto, became more flexible in its stance. In December, the RBI cautioned about dangers to the system without coming out against the government. As policy has shifted from negative to neutral, the central bank is now choosing not to aggressively resist but to keep its distance.
Legal and Public Perceptions Continue to Influence Policy
Even though more regulations are in place, the general public still misunderstands. People in India are still confused about whether cryptocurrencies are legal, even though none have been officially banned. The Supreme Court of India has expressed concern about delays in issuing comprehensive crypto regulations and has urged the government to provide clearer policies.
Economic affairs secretary Ajay Seth announced plans to revise a key crypto policy paper early this year. However, the Union Budget released in February did not include any tax relief, prompting criticism from industry groups like the Bharat Web3 Association.
Coinbase’s international policy vice president noted the government’s opportunity to increase its tax base by encouraging onshore trading of previously offshore crypto activities. As India moves through these changes, those involved in crypto are waiting for new tax rules and clear regulations to help include digital assets in the economy.
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India’s Crypto Sector Pushes for Tax Cuts as U.S. Pro-Crypto Shift Spurs Government Talks
- India’s crypto industry seeks to reduce the 30% capital gains tax and 1% TDS to encourage domestic growth.
- Government and RBI show increased engagement and softer stance, yet public misconceptions and regulatory delays persist.
India’s cryptocurrency sector is actively advocating for tax changes as officials in New Delhi engage with the industry. The change in policy follows a renewed pro-crypto position from the United States after Donald Trump’s return to the White House.
According to a report by Financial Times, since 2022, India has applied a 30% capital gains tax on crypto profits and a 1% tax deducted at source (TDS) on every crypto transaction. These measures aimed to prevent illegal activities and improve identification but have pushed over 90% of Indian crypto trading offshore, according to the Esya Centre, a New Delhi think tank.
Industry leaders now report more regular discussions with government officials. Ashish Singhal, co-founder of CoinSwitch, stated that policy meetings have shifted from every six months to nearly weekly sessions. The current tax policy has drawn objections for limiting domestic crypto activity. Industry executives propose reducing the transaction tax to 0.1%, which they argue would maintain traceability while encouraging growth.
The request comes from worries that taxes deter people from investing and trading in the country. The crypto industry in India is predicted to see growth from $2.5 billion in 2024 to over $15 billion in 2035, Grant Thornton says. Now that Coinbase and Binance are working in India, the market shows renewed faith.
Earlier this year, the RBI which at one time opposed crypto, became more flexible in its stance. In December, the RBI cautioned about dangers to the system without coming out against the government. As policy has shifted from negative to neutral, the central bank is now choosing not to aggressively resist but to keep its distance.
Legal and Public Perceptions Continue to Influence Policy
Even though more regulations are in place, the general public still misunderstands. People in India are still confused about whether cryptocurrencies are legal, even though none have been officially banned. The Supreme Court of India has expressed concern about delays in issuing comprehensive crypto regulations and has urged the government to provide clearer policies.
Economic affairs secretary Ajay Seth announced plans to revise a key crypto policy paper early this year. However, the Union Budget released in February did not include any tax relief, prompting criticism from industry groups like the Bharat Web3 Association.
Coinbase’s international policy vice president noted the government’s opportunity to increase its tax base by encouraging onshore trading of previously offshore crypto activities. As India moves through these changes, those involved in crypto are waiting for new tax rules and clear regulations to help include digital assets in the economy.
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