Indian Crypto Exchanges Push for Tax Changes Ahead of Union Budget
Indian crypto exchanges are urging tax reform before the Union Budget, citing current taxes that discourage onshore activity.Summary
Indian cryptocurrency exchanges are strongly advocating for significant tax reforms ahead of the upcoming Union Budget presentation on February 1st, arguing that the current tax framework discourages domestic activity and innovation. The existing regime, established in 2022, imposes a flat 30% tax on crypto gains and a 1% Tax Deducted at Source (TDS) on nearly all transactions, regardless of profit, while prohibiting the offsetting of losses against gains. Industry leaders from exchanges like WazirX and ZebPay contend that these transaction-level taxes and loss-set-off restrictions are outdated compared to global market evolution and stricter domestic oversight. They propose a calibrated reduction in TDS and a review of loss set-off provisions to restore onshore liquidity and compliance. Binance's APAC head suggested a shift toward taxing only realized capital gains, removing transaction levies, and moving away from what he termed a "tax-and-deter" approach. These calls coincide with the implementation of stricter Know Your Customer (KYC) rules by India’s Financial Intelligence Unit, as authorities remain concerned about tracking taxable income due to offshore exchanges and DeFi tools.
(Source：Cointelegraph)