As the crypto industry gears up for Budget 2025, stakeholders are hopeful for a streamlined tax structure and clear compliance guidelines. The market has seen significant changes, especially with the rising prices of Bitcoin and the recent establishment of a cryptocurrency working group by US President Donald Trump. Indian players in the virtual assets sector believe this is a pivotal time for India to lead in the global crypto landscape.
The 2022 Budget provided some clarity for the crypto ecosystem, but it also introduced new challenges, particularly concerning taxation. Edul Patel, co-founder and CEO of Mudrex, highlighted the impact of a 1% Tax Deducted at Source (TDS) on crypto transactions. “This led many investors to seek foreign exchanges, making it difficult for the government to track activities,” he stated. Furthermore, the rule preventing investors from offsetting losses against gains has discouraged participation in the market.
The industry is now calling for a more balanced approach that encourages innovation and supports sustainable growth. Crypto exchanges are advocating for a reduction in TDS to 0.01% and for the ability to offset losses. These changes could enhance investor confidence and stimulate positive momentum within the sector.
Nikhil Sethi, founder and managing director of Zuvomo, emphasized the significance of Budget 2025 for India. “India ranks No.1 in the number of crypto holders and No.3 in tech unicorns globally. However, we have lagged behind in the Web3 wave,” he said. The market cap of Web3 doubled in 2024, while the Total Value Locked (TVL) in Decentralized Finance (DeFi) surged by 2000% year-on-year. Sethi pointed out that ambiguity in compliance and a regressive tax regime have pushed startups and talent to other countries.
The recent approval of Bitcoin and Ethereum exchange-traded funds (ETFs) in the US highlights the need for forward-thinking regulations. With thousands of tech startups in India, the crypto industry is urging the government to adopt balanced taxation, clear compliance frameworks, and innovation-friendly policies.
Last week, Bitcoin reached an all-time high of over $109,000. As the Indian crypto landscape evolves, exchanges stress the importance of aligning local policies with global regulatory standards. The call for a more supportive environment is clear, and the upcoming Budget could set the tone for the future of crypto in India.
