Union Budget 2023-24 Expectations: Crypto Sector Looks Forward to Tax Deduction

Union Budget 2023-24 will be tabled by Finance Minister Nirmala Sitharaman in the Indian Parliament today at 11 am. Just like various other sectors, the crypto market is also expecting some favourable announcements for its growth in India in the coming financial year. From tax regimes that can help the demand for cryptos to a regulatory framework on cryptos in India, there is a lot for the crypto industry to be hopeful about the last full budget of the Narendra Modi Government before the general elections in 2024.

In the Union Budget last year, the FM took some tough calls for the crypto sector, introducing 30 percent tax on profits and a 1 percent tax deducted at source (TDS) on all crypto transactions. The government's decision on including virtual assets (like cryptocurrency) under the tax regime was considered to be an indirect way to include crypto transactions in the legal ecosystem. However, it has been a year and the crypto transactions still await to be legal.

After the Economic Survey 2022-23 report presented on January 31, it looks that the government is unlikely to give any prominent thought for legalising the crypto transactions. Citing the FTX collapse, the government has highlighted how the crypto market has proved to be filled with vulnerabilities. The RBI Governor Shaktikanta Das had earlier clarified that the “RBI would like to stick to its stance of prohibiting them completely.”

One of the primary demands for the sector will be a tax cut on the crypto transactions. According to a CoinDesk report, the industry experts expect a reduce in TDS to minimum 0.1 percent from current 1 percent.

Another important announcement to look forward to is India's mention of the work on its digital currency or CBDC. An RBI official previously stated that the transactions using CBDC will remain anonymous to certain degree and will be only take place between banks in India.