The Indian crypto sector had been hoping for tax relief from the budget for the 2023-24 fiscal, but were met with disappointment as the Finance Minister, Nirmala Sitharaman, did not mention crypto or virtual assets at all. The existing 1% TDS and 30% on crypto gains remain unchanged, and there is no offsetting of losses against profits on different crypto trades. To discourage the use of non-compliant or offshore platforms, the government has announced penalty provisions for non-payment of TDS, which can include a prison term of up to six months, and a 15% interest per annum for late payment. The introduction of crypto taxes has caused a significant drop in trading volume, with over $3.8 billion moving overseas. To benefit Indian platforms that abide by local laws and tax obligations, the penalty for failure to pay TDS by using non-compliant or offshore platforms has been introduced. This is to encourage users to use tax-compliant platforms when investing in crypto.
