The cryptocurrency community is looking for relaxation from the strict crypto tax attitude as India's finance minister Nirmala Sitharaman is about to present the budget for 2023–2024. On February 1, 2023, the Union Budget 2023 will be presented to the nation's Parliament. Even while there is still a lack of legislative certainty for the cryptocurrency sector globally, its size is expanding. This is in spite of the significant obstacles it faced, including the recent bankruptcy of FTX and the collapse of the Terra network.
Countries like Singapore and India are taking a selective approach to cryptocurrency regulation, while many other nations around the world have yet to state their positions clearly. The country's central bank recently introduced the Digital Rupee (e₹) for the nation's wholesale enterprises in a few cities, which might be the start of a massive undertaking. Additionally, this is viewed as a component of the Reserve Bank of India's continuing efforts to introduce its own Central Bank Digital Currency (CBDC).
Reduced Crypto Tax Announced in Budget?
The crypto community is expecting for some relief from the crypto tax during the upcoming budget session. The high tax on virtual digital assets is threatening the prospects of the business in the country, along with a lack of clarity about the trading of cryptocurrencies and its legal framework. The government of the nation has not yet made it clear how cryptocurrency businesses should register and conduct business there. Given the possibility of increased company migration from India, this is even more crucial.
India currently taxes all cryptocurrency-related profits at a rate of 30%. Trading losses on one type of cryptocurrency cannot be compensated by gains on another. Additionally, traders must also pay 1% tax deductible at source on cryptocurrency transfers.
