- India’s Ministry of Finance confirms that the 30% tax on crypto gains will remain in effect with no short-term changes planned.
- Bitcoin and other crypto-based exchange-traded funds will not be approved in India, according to an official government clarification.
- Uncertainty in India’s crypto policies continues to drive major exchanges and blockchain businesses to shift operations overseas.
India’s Ministry of Finance has ruled out any immediate amendments to the existing cryptocurrency tax policies. The confirmation halts speculations about a possible reduction in the 30% tax on digital asset gains. Additionally, the government clarified that it has no plans to approve Bitcoin or any other crypto-based exchange-traded funds soon.
Under the current regime, profits from cryptocurrency transactions are taxed at 30 percent. Alongside this, a 1% tax deducted at the source applies to transactions above INR 10,000. These policies were introduced in 2022 and have remained unchanged since their implementation. Despite ongoing demands from industry players for revisions, the government has decided to retain the status quo.
Crypto Industry Expresses Frustration
Some of the leaders in the industry have also expressed dissatisfaction due to the absence of clarity in regulations. According to Siddharth Sogani, the CEO of blockchain analytics firm Crebaco, the lack of regulatory clarity has pushed and encouraged firms to go to other countries. He referred to sending in proposals and having meetings with government officials year after year, and finally moved his business out of the country due to no policy response coming in.
Due to regulatory uncertainty and security issues, several Indian exchanges have moved operations to foreign jurisdictions. In 2023, WazirX relocated to Singapore after a cyberattack resulted in a $230 million loss. More recently, CoinDCX reported a $44 million theft, further exposing the vulnerabilities that come with a lack of structured oversight in the sector.
Speculations on Bitcoin Reserve Dismissed
Although the latest political rhetoric suggested that the country is contemplating Bitcoin reserves, the current situation does not show the same. Even though the world is inclined to accept the adoption of cryptocurrencies with restrictions, India continues its half-hearted stance and does not want to take any extra steps to get more involved in digital currencies via ETFs or changes and updates in regulations.
India crypto is in limbo. Businesses and investors continue to struggle without any policy reform that they could act upon or any formal regulation. Maintaining the current tax system is a tough blow by the government that distances India even more from nations that move their crypto policies forward.
