Indian Finance Minister Nirmala Sitharaman did not change the cryptocurrency tax rules in her 2024-2025 budget speech announced on Tuesday.

The main demand of the Indian crypto industry was to reduce the controversial 1% withholding tax (TDS) on crypto transactions to 0.01%. The industry has represented government officials with data from a variety of sources, including a think tank study that provides evidence in support of lowering TDS.

The industry also demanded a graduated tax based on profits rather than a flat 30% rate and allowing losses to be offset by gains. They also proposed multi-agency regulation.

“We were hoping that there would be a relaxation in the taxation framework on virtual digital assets (VDA) in this budget, but the absence of any announcement is not particularly annoying given the overall negative attitude of the government towards the sector,” said Dilip Chenoy, President of the Bharat Web3 Association, adding that “the taxation framework should be rationalized.” He added: “They will continue to work for us.”

Notably, the government increased long-term capital gains tax from 10% to 12.5% ​​and short-term capital gains taxes from 15% to 20%. It is unclear whether this will have any impact on crypto trading.

Supreme Court crypto tax advisor Rajat Mittal said, “Increasing the long-term capital gains tax from 10% to 12.5% ​​and the short-term capital gains tax from 15% to 20% will encourage retail investors to move from traditional assets such as securities to cryptocurrencies.” “While this transition is possible, it is important to note that crypto gains are taxed at a flat 30% rate and unlike securities, losses cannot be offset by gains,” he said.

“Positively, the removal of angel investor tax for all classes of investors will strengthen the startup ecosystem in India. Given India’s immense Web3 talent and potential, we expect more Web3 startups to establish themselves in India,” Chenoy said.

Sumit Gupta, co-founder of Indian crypto exchange CoinDCX, said, “CoinDCX welcomes the Finance Minister’s announcement in today’s budget statement on the removal of angel investor tax for all classes of investors. This will significantly strengthen the technology startup ecosystem in India, especially the Web3 sector.” “We believe,” he said.

This is the first budget since Prime Minister Narendra Modi was elected for the third consecutive term. Modi’s Bharatiya Janata Party (BJP) failed to win a majority in this year’s elections and had to form a coalition government, which brought with it limitations.

Among other initiatives, the budget includes 26,000 crore rupees ($3.1 billion) for road projects in Bihar, where Modi has an alliance partner, and 15,000 crore rupees ($1.8 billion) for another partner’s plans to develop a state capital in Andhra Pradesh. ) envisages financial support.

This budget is seen as a road map of his vision for the next five years, taking into account the view reflected in the unexpected election results.