India Keeps Restrictive Crypto Tax Rules In 2023 Budget
India has kept its restrictive crypto tax rules unchanged in 2023. In fact, Finance Minister Nirmala Sitharaman did not mention crypto, virtual digital assets, blockchain or central bank digital currencies (digital rupee) while unveiling the nation’s budget, which indicates the latest tax rules.
Last year, the world's largest democracy instituted stiff taxes on crypto transactions: a 30% tax on profits and a 1% tax deducted at source (TDS) on all transactions. Predictions from the industry that the year would be a "period of pain" ostensibly came true.
Crypto trading volumes plummeted almost immediately, Indians moved more than $3.8 billion in trading volume from local to international crypto exchanges in the nine months after the announcement and interest in crypto nosedived.
Several individuals closely working in the crypto regulatory space had publicly said they were hopeful for a tax cut but privately opined that it was unlikely, CoinDesk had reported earlier this week.
The primary demand from the industry and recommendation from policy think tanks was to reduce the TDS to 0.01%, or at minimum to 0.1%.
No changes to existing crypto taxes has left "indian crypto companies on the stairway to heaven," said Rajagopal Menon, Vice President of Indian crypto exchange WazirX. "We hope that the government will reconsider its position on crypto taxes."
India has kept a crypto bill in cold storage since early last year saying crypto regulation cannot succeed without global coordination – something its prioritized with its agenda setting power of holding the G-20 presidency.
Read More: India Has Clamped Down on Crypto. What Will It Do With Its G-20 Power?
UPDATE (Feb. 1, 2023 07:18 UTC): Adds industry reaction comment.