Indian crypto traders seek Tax relief, WazirX CEO drops suggestion
The Indian crypto market is still waiting for a bull run with an expectation that the government might give out some regulatory guidance. Amid this speculation, one of the biggest crypto exchanges in India, WazirX’s CEO advocated about reducing crypto trading linked tax rates in the upcoming interim budget 2024.
WazirX’s view on tax rates
Nischal Shetty, CEO of WazirX, took to social media to highlight concerns faced by crypto traders in India regarding the current tax structure. He pointed out that the flat 30% income tax rate poses challenges for crypto traders, as it doesn’t align with the existing tax slabs.
He suggested an instance where individuals earning up to INR 2.5 lakh don’t pay any tax, but crypto traders earning INR 2 lakh would be subject to a 30% tax. Similarly, those earning INR 5 lakh, typically taxed at 5%, face a 30% tax rate as crypto traders.
WazirX CEO emphasized that this contradicts the intended purpose of tax brackets, hurting those they were designed to benefit. The crypto community urges the government to align income tax for crypto earnings with existing tax slabs.
Earlier, he addressed the issue of Tax Deducted at Source (TDS), which involves a 1% deduction every time an Indian trader sells digital assets, causing various challenges. High-frequency traders, in particular, experience capital lock-in, lengthy refund cycles, and an inability to trade until the refund is received.
TDS rate cut ahead?
Shetty argued that the high TDS rate hurts tax department revenues, as it leads to lower income tax collections from high-frequency traders. He suggested reducing the TDS rate to 0.01% or eliminating it altogether to support the Web3 community’s success.
In other news, Indian crypto exchanges are offering hassle-free transfers for users looking to move their crypto assets from banned offshore exchanges following the Financial Intelligence Unit’s (FIU) ban. CoinDCX set aside $1 million to assist users in transferring assets, while BuyUcoin announced zero-fee transfers in response to the FIU ban.
The FIU issued notices of noncompliance to several offshore exchanges, urging the Ministry of Electronics and Information Technology to block their websites if they fail to comply with Indian regulations.
The global market cap has recorded a massive inflow since October 2023. The cumulative market cap now stands at $1.68 trillion with Bitcoin trading around $42k-$42k price level.