The most-anticipated Union Budget 2024-25, presented by Finance Minister Nirmala Sitharaman on July 23, 2024, has disappointed the Indian crypto community once more. With high expectations for reforms to fuel the cryptocurrency market, there was no mention of a number of key issues for which traders and investors were keenly awaiting redress. This article provides comprehensive report on what the union budget 2024 for crypto traders holds.
1. No Reduction in TDS Rate: The other major demand from the crypto fraternity was that of a reduction in the rate of TDS for transactions in VDA. This stands at 1 per cent at present, which is considered very high by many, hence it discourages trading. The fraternity was seeking a reduction to 0.01 per cent, and this has not been catered to in the union budget 2024.
2. No Increase in Threshold: It was also expected that the threshold for applicability of TDS would be increased. The threshold is very low and was expected to get an enhancement to Rs 5,00,000 so more people participate in the market. This has not been changed in the budget.
3. No Provision for Offset of Losses: It also did not bring in any provisions regarding offsetting and carry forward of losses from crypto trading. This has been one major contention point, as traders are currently unable to set off their losses against gains, which is allowed for other asset classes.
4. Lack of Alinement with Other Asset Classes: Members of the crypto community have been arguing that crypto taxation be aligned with other asset classes. It will involve the equalization of treatment of crypto income and allowing more preferential tax rates. No steps were taken in this regard within the budget.
5. Regulatory Uncertainty Continues: The lack of clear regulation has always been a major hindrance to the crypto industry in India. There were no new insights or frameworks for the regulation of cryptocurrencies in the budget. This all leaves traders and businesses in uncertainty.
Economic Survey Highlights: Indeed, the Economic Survey presented on July 22, 2024, pressed for urgent reforms in sectors like agriculture and MSMEs, but it remained silent over the cryptocurrency market.
Market Reactions: The crypto market in India responded very negatively to the announcements in the budget. Traders expressed their disappointment on social media about the opportunities that were missed for growth and development in the sector.
Government's Stand: Union Finance Minister Nirmala Sitharaman underscored that the government was still extremely cautious about cryptos, flagging concerns over financial stability and security. She told the Lok Sabha, "Therefore, it is an area in which we have to be really cautious as far as stable finance is concerned."
Industry Reaction: Industry leaders and crypto advocates called for continuous dialogue with the government on the way ahead.