India’s Finance Minister Nirmala Sitharaman has presented the 2024-2025 budget, retaining the existing crypto tax rules despite calls for reform from the crypto industry. The primary demand was to reduce the tax-deducted-at-source (TDS) on crypto transactions from 1% to 0.01%, along with introducing progressive taxes on gains and allowing losses to offset gains. However, these requests were not addressed.
Instead, the government increased the long-term capital gains tax from 10% to 12.5% and short-term capital gains tax from 15% to 20%. Rajat Mittal, a Supreme Court crypto tax counsel, noted that these changes might push investors towards cryptocurrencies, though crypto gains still face a flat 30% tax rate without the ability to offset losses.
On a positive note, the budget abolished the angel tax for all investor classes, which is expected to boost the Indian startup ecosystem, particularly in the Web3 sector. Sumit Gupta, co-founder of CoinDCX, welcomed this move, anticipating significant benefits for tech startups.
The budget is the first since Prime Minister Narendra Modi secured a third term but failed to achieve a majority, leading to a coalition government. The budget also includes substantial financial support for infrastructure projects in states allied with Modi’s party, indicating a roadmap for his vision for the next five years amidst the election results.
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