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Budget 2025: Income Tax Relief on Cards for Cryptocurrency! Key Expectations From Nirmala Sitharaman

With Budget 2025 approaching, the cryptocurrency sector eyes potential income tax relief. Expectations from Nirmala Sitharaman include reduced TDS, regulatory clarity and tax reforms to boost growth.

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Budget 2025

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As the Budget 2025 draws near, the cryptocurrency industry in India is gearing up for potential changes that could impact its future growth. Industry leaders are hopeful that Finance Minister Nirmala Sitharaman’s upcoming budget will address key concerns surrounding income tax regulations and provide clearer frameworks for digital assets.

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Current Tax Regime for Cryptocurrency in India

At present, the Indian government applies a flat 30% income tax on capital gains from virtual digital assets (VDAs) like cryptocurrencies. Along with this, a 1% Tax Deducted at Source (TDS) is levied on all crypto transactions. While the existing tax structure has raised concerns within the industry, stakeholders are optimistic that Budget 2025 could bring significant relief.

Calls for Lower TDS and Simplified Taxation

One of the major expectations for Budget 2025 is a reduction in the TDS rate from 1% to just 0.01%. Industry leaders argue that such a move would improve tax compliance and help prevent capital flight, where traders shift to foreign exchanges to avoid high tax rates. By reducing TDS, the government can ensure that the tax system remains fair while encouraging cryptocurrency investors to remain in the domestic market.

Offsetting Crypto Losses Against Gains

Another key issue raised by crypto industry stakeholders is the inability to offset losses from crypto trading against gains. Currently, losses from virtual digital assets cannot be deducted, creating an imbalance in the tax system. If this issue is addressed in Budget 2025, it could provide greater relief for crypto traders and promote a more balanced and equitable taxation system.

Clearer Regulatory Framework for Cryptocurrencies

A long-standing demand from the cryptocurrency industry has been the establishment of a clear and well-defined legal framework for cryptocurrencies. In Budget 2025, there is hope that the government will address this by creating a regulatory body for digital assets, offering much-needed certainty to the market. This move could spur more investment, boost innovation and establish India as a hub for cryptocurrency activities.

In addition to tax reforms, industry experts are hoping for budget provisions that offer incentives like tax breaks and subsidies for blockchain and Web3 startups. This would help position India as a global leader in decentralised finance (DeFi), digital identity solutions, and tokenised assets, creating a thriving ecosystem for innovation in the crypto space.

Cryptocurrency Budget
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