In the budget for the financial year 2023-24, the Indian government has offered no relief in the high taxes for the crypto sector, which were introduced for the first time through the last annual budget in February 2022, media reports said.
Presented on February 1, the budget, in fact, introduces penalties on Indian investors using offshore and non-complaint exchanges to avoid TDS. The penalty could be equal to the amount evaded in TDS and can include up to six months in prison term.
Right now, Indian crypto investors need to pay 1% TDS on virtually every crypto transaction and 30% on gains. The provision to offset losses against profits on different trades in a financial year is not available to Indian crypto traders.
Given this, trading volume on Indian exchanges has plummeted up to 90% and a sizeable chunk of trading volume has shifted to overseas platforms. As per a recent report, trading volume worth over $3.8 billion shifted from Indian crypto exchanges to offshore crypto exchanges in the nine months since crypto taxes were introduced in February 2022.
“#Budget2023 had no mention of Crypto. A reduction in 1% TDS to 0.01% would have helped the millions of traders in India. In terms of regulation, I think it’s best for India to regulate in line with rest of the world. Need to wait until global regulations are clear, said Nischal Shetty, co-founder and CEO of WazirX, on Twitter.
