New Delhi:
Budget 2025: Cryptocurrency Industry in India is expecting positive and progressive changes in the Union Budget of 2025. India is counted among the top countries globally in the matter of adopting cryptocurrency. Despite this, it is facing sector challenges due to the strict provisions related to tax implemented in the Union Budget of 2022. These rules include 1% TDS (tax deducted at source) on crypto transactions and loss of deficit compared to profit.

According to Section 2 (47A) of Income Tax, cryptocurrency has been classified as virtual digital assets. Despite this, it has not been officially accepted by the central government as a legal tender. This is the reason that the Income Tax Department (ITD) has not issued any detail guidelines regarding cryptocurrency.

Budget 2025 expectations (Budget 2025 Expectations):

Low TDS (Lower TDS)

Crypto Community demands that under section 194S, the rate of tax deduction (TDS) on source on virtual digital asset (Virtual Digital Asset – VDA) should be reduced from 1% to 0.01%. Due to the current rate, investors are reluctant to invest in it, due to which there has been a decrease in liquidity and participation in the market. The Cryptocurrency community argues that reducing this rate can promote more transactions.

According to a Business Today report, Balaji Srihari, Vice President of CoinsWitch said, “We are requesting the government to reduce TDS from 1% to 0.01 on VDA transaction. It will help track transactions and increase revenue. ”

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CoinDCX’s -Founder, Neeraj Khandelwal (Neeraj Khandelwal) said via a post on X “The government is seeking suggestions for Union Budget 2025-2026. Better web3 ecosystem can be done three things:

1. Crypto tax rate should be reduced to 0.01%.
2. Amendment to section 194S and 115BBH of Income Tax to ensure that offshore platforms follow local tax laws.
3. Taxpayers should be allowed to compensate the damage caused by virtual digital asset (VDA) transactions from the profit from other VDA trades.

At the same time, PI42 co-founder and CEO Avinash Shekhar said, “To promote the crypto industry, reduce the TDS from 1% to 0.01% on all transactions, reduce 30% tax and compensate for losses Provision is necessary.

Tax deduction

The Crypto Community has suggested to reconsider the tax deduction limit given under Section 194S, and advocated to increase from Rs 50,000 to Rs 5,00,000.

Zebpay’s COO Raj Karakara said, “To promote this industry, India will have to make its crypto policies in line with the global regulatory structure. We hope that in the Union Budget 2025, 30% tax on Crypto Income and 1% TDS will be considered again. Easy tax structure will increase the participation of investors in this industry, which will also increase liquidity and trading volumes. He said, “If the government recognizes crypto as a formal asset class, then the industry will benefit greatly.”

Crypto Taxation Rules

The government has imposed a 30% tax on the profit from Crypto Income from the Union Budget of 2022. This tax rate is applied to any income caused by selling or transferring crypto. Unlike the second asset, no deduction or loss can be applied to reduce taxable crypto income. Therefore, if you earn profit from Crypto, then you have to pay the entire tax amount.

Apart from this, 1% TDS is applied for regular investors annually Rs 50,000 or for individual investors more than Rs 10,000. This TDS helps the government to monitor the crypto trade.