Budget 2025: Crypto Industry Seeks Reforms and Relief
The crypto industry in India is eagerly awaiting the Union Budget 2025, hoping for measures that provide regulatory clarity, tax relief, and innovation incentives. Key expectations include a well-defined regulatory framework, reductions in capital gains and transaction taxes, and treating crypto-related income on par with other income sources. Industry leaders believe such steps could drive growth and establish India as a global hub for blockchain technology and digital assets.
India making crypto taxation regulations in 2023 seemed to be a step forward with good intentions, making the government appear open towards this flourishing sector. Experts now say, however, that this is just the beginning, and it needs to address the legality of crypto assets, which the industry has long been demanding. Gracy Chen, CEO of Bitget, said, "We are watching the regulatory stance from India. It calls for a balanced approach and a lot of scope in Budget 2025 to drive innovation, financial inclusion, and thereby solidify the position of India as a leader in finance and business".
As cryptocurrencies gain more popularity, there is a growing concern for the regulation of these instruments. Sathvik Vishwanath, CEO and Founder of Unocoin, advocated for the creation of a specific regulatory body for cryptocurrencies to ensure clear and effective governance. Vishal Sacheendran, Head of Markets at Binance, believes that a well-balanced regulatory framework should support innovation while ensuring investor protection.
The year 2024 saw incredible growth in the crypto sector with Bitcoin crossing $100,000 and a significant institutional investment. Indian investors also began to show an increasing interest with meme coins such as Dogecoin and Shiba Inu emerging as a favorite. The $230 million hacking incident in July 2024 at WazirX was a clear indicator of the urgent need for strict regulations that will protect the consumer and secure the trust of investors.
Taxation is still one of the most contentious issues for the crypto industry. Budget 2022-23 levied a 30 percent tax on gains from virtual digital assets (VDAs) and brought in a 1 percent tax deducted at source (TDS) on every transaction. According to industry leaders, these measures have killed growth and innovation. According to Shivam Thakral, CEO of BuyUCoin, high taxation has been one of the main problems and expressed optimism that the government would reduce the tax burden in Budget 2025 for a more friendly regulatory environment.
The differential taxation between crypto assets and other investment instruments is also one of the main concerns. For example, listed securities like stocks and equity mutual funds pay short-term capital gains tax at 20 percent and long-term capital gains tax at 12.5 percent. In contrast, crypto assets have a flat 30 percent tax. In addition, there are provisions for investors of traditional assets that permit the deductibility of losses against gains and carrying of unadjusted losses forward. In contrast, such provisions are absent for crypto assets, placing them at a disadvantage. Thangapandi Durai, CEO of Koinpark, advocated for allowing crypto investors to offset their losses against gains to encourage participation and clarity.
Innovation incentives is another critical demand from the industry. Raj Karkara, COO at ZebPay, said there is a need for policies such as subsidies or tax breaks for blockchain and Web3 startups, positioning India as a leader in decentralized finance, digital identity solutions, and asset tokenization. The industry believes clear regulations and lesser taxes can unlock immense potential for businesses and help the country's economic growth.
The crypto sector is drawing inspiration from global developments, particularly the strides taken by the United States towards regulation of digital assets. According to Srinivas L, Founder and CEO at 9Point Capital, 'India cannot fall behind in this domain'. By initiating transparency, reducing the tax burden, and introducing a robust regulatory framework, India can become one of the front-runners in the global adoption of digital assets, as well as innovation.
Industry experts believe that Budget 2025 is an excellent opportunity for the government to tackle the issues the crypto sector is currently facing. Clear regulations, rationalized taxes, and incentives for blockchain and AI innovation can empower the Indian ecosystem and drive growth in the promising sector. India can lead the charge in the digital asset revolution by aligning its policies with global trends and addressing domestic concerns, thus fostering a vibrant ecosystem that balances innovation with investor protection.
