Millions of Indian cryptocurrency owners were disappointed when the budget for 2023 did not include any mention of cryptocurrencies or blockchain technology. Many in India’s cryptocurrency community hoped that the high-priced cryptocurrency tax of March 2022 would be reduced.
Indian Minister of Finance Nirmala Sitharaman delivered the budget to the union on February 1, during which she announced significant changes to the income tax bands. During the discussion, however, the minister did nothing to discuss cryptocurrencies, digital currency issued by central bankers, or blockchain technology. India had imposed a 30% tax on crypto earnings, and a 1% tax deducted at source (TDS), on all crypto transactions in the past year. This effectively stopped a business from growing almost immediately.
TDS was imposed on all cryptocurrency transactions with the main goal of compiling an accurate count of Indians who use cryptocurrency. The government will have access to this information starting in May 2023 when Indians submit income tax forms.
Within ten working days, trading volumes on India’s major cryptocurrency exchanges plunged by 70%. The volume dropped nearly 90% in the three months following the implementation of the new tax policy. Because of India’s stringent tax policies, cryptocurrency traders began to move to offshore exchanges. New cryptocurrency ventures were also forced to relocate out of India.
Subhash Chandra Garg (the previous Finance Secretary) stated before that more information should be provided about crypto-taxation. He suggested that it was possible that there would be no new modifications to the budget for 2023. Chandra was also the head of the committee responsible for the creation of the first crypto-law.