Tech
Expectations for the 2024 budget: from technological innovation to tax regularization, what the cryptocurrency sector expects from the budget
With less than a week to go before Union Finance Minister Nirmala Sitharaman presents the interim budget, players in the Indian cryptocurrency industry are hoping for the introduction of a well-defined legal framework and regularization of the tax structure to address tax complexities .
With less than a week to go before Union Finance Minister Nirmala Sitharaman presents the interim budget, players in the Indian cryptocurrency industry are hoping for the introduction of a well-defined legal framework and regularization of the tax structure to address tax complexities .
The digital asset industry takes a much more nuanced approach to delineating a definition of virtual digital assets (VDA). Beyond that, implementing policies to promote innovation, research and development is also key to a stronger cryptocurrency industry in the country.
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The digital asset industry takes a much more nuanced approach to delineating a definition of virtual digital assets (VDA). Beyond that, implementing policies to promote innovation, research and development is also key to a stronger cryptocurrency industry in the country.
“Tokenization of real-world assets represents a $10 trillion opportunity, and we are already seeing rapid progress in the field of tokenized RWAs. There is an urgent need for investment and innovation in these segments, and if fueled with progressive policies, India has the potential to become a global leader in the digital asset space. We urge the government to amend the VDA definition, explicitly excluding tokenized assets with proven underlying value, similar to established precedents such as gift card exemptions,” said Manhar Garegrat, Country Head of India & Global Partnerships at Liminal Custody Solutions .
With the wider adoption of artificial intelligence and other advanced technologies, Tapan Sangal, founder of Mai Labs, believes that 2024 will be the year of “transition from fundamental learning to imperative application of lessons” for the blockchain industry .
“From the budget to be announced soon, our confidence in the government extends to calling for a reconsideration of the tax system for the virtual digital asset sector, promoting a regulatory environment that optimally exploits technological innovation. Ethical considerations and rigorous regulations are critical to prevent inequality and manipulation in this dynamic landscape,” Sangal said.
Manhar Garegrat has also supported the removal of the 1% tax deduction at source (TDS), which has influenced policies that disincentivize domestic participation in the digital asset market.
“This incentive will attract investment, generate highly skilled jobs and consolidate India’s position as a global leader in the safe custody of digital assets. Just like stocks, users should be allowed to offset losses related to digital assets, which would encourage more startups to enter this space,” Garegrat noted.
For the industry to thrive in the country, it is important for the government to focus not only on tax regularization but also on Web3 startups and the creation of special economic zones.
“The web3 industry looks forward to the Union Budget in anticipation of providing a new opportunity to support a thriving and responsible Web3 ecosystem in India. Web3 and blockchain, going forward, can solve many of India’s challenges in sectors such as payments, education, healthcare, etc.,” said Nischal Shetty, co-founder, Shardeum.
According to Shetty, the introduction of India-specific national regulations for greater stability and dedicated funds for local blockchain products would help the development of the Web3 ecosystem.
Highlighting the need for tax incentives and sandboxes, Shivam Thakral, CEO, BuyUcoin, said, “We need tax incentives and sandboxes to nurture these seeds and turn them into thriving startups. Sandbox initiatives need protection to encourage experimentation. This will create a new generation of jobs, push India into the global DeFi and blockchain space, and unlock economic growth. By embracing cryptocurrencies with vision and collaboration, India can lead the world towards a digitally inclusive financial future, leaving competitors in the shadows.”
With the presentation of an interim budget and a comprehensive budget after the elections, the cryptocurrency sector awaits the introduction of a tax framework and comprehensive legal regulation to unlock its true potential.
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