Jai Sahu
Renewed Leadership in India’s Finance Ministry
India recently wrapped up its general elections on June 1, with results paving the way for Narendra Modi’s third consecutive term as Prime Minister. Nirmala Sitharaman, now re-assigned as the finance minister after her initial stint in 2019, rejoins Modi’s cabinet. The Indian crypto community offers varied responses to Sitharaman’s return to the finance ministry.
Cryptocurrency Taxation in the Spotlight
Cryptocurrencies in India have faced scrutiny under the Ministry of Finance. Since 2022, all profits from crypto transactions are subject to a 30 percent tax, with a 1 percent Tax Deducted at Source (TDS) applicable to Virtual Digital Asset (VDA) transfers.
Dilip Chenoy, chairperson of the Bharat Web3 Association (BWA), extends congratulations to the new government. Furthermore, he expresses commitment to collaborating with officials to nurture Web3 growth.
“At BWA, our dedication to working alongside the government to foster Web3 sector expansion remains steadfast. We aspire to position India as a global Web3 hub. We eagerly anticipate ongoing engagement and offer our support to the government in crafting forward-thinking regulations that encourage innovation while safeguarding consumers in the dynamic Web3 landscape,” Chenoy shares on LinkedIn.
Awaiting Tax Reform
The Indian crypto community eagerly awaits FM Sitharaman’s potential revision of tax laws affecting the sector. Despite calls for change, no tax relief was announced in the interim annual budget earlier this year.
Sitharaman’s re-appointment as finance minister raises concerns among India’s crypto enthusiasts, fearing a lack of tax reform for the digital assets industry. Social media platforms have become avenues for expressing sentiments on this development.
FM Sitharaman is slated to present the full budget for FY 2024-2025 next month. Crypto analysts anticipate a potential reduction of the one percent TDS on each crypto transaction to 0.01 percent in her upcoming budget presentation.
Clarifications on Cryptocurrency
In March of this year, Sitharaman remarked that India does not view cryptocurrency as a ‘currency’ option. Instead, she emphasized that crypto-assets could serve various purposes, including trading and wealth accumulation.