Majority of Indian Crypto Investors Call for Tax Reform Ahead of Union Budget 2025
As the countdown to the Union Budget 2025 begins, a new survey conducted by Mudrex, a leading platform for crypto investments, reveals a notable sentiment among Indian crypto investors. The survey found that a significant 85% of respondents advocate for substantial reforms to the current tax framework governing cryptocurrency investments, particularly emphasizing a need to lower the existing 30% tax on gains.
Concerns over Current Tax Structure
The survey results pinpoint that the chief concern among Indian crypto traders lies in the hefty 30% taxation on their gains. A striking 67.5% of participants identified this high tax rate as a major deterrent to engaging in crypto trading. Conversely, only 7.14% of those surveyed expressed that the 1% Tax Deducted at Source (TDS) on transactions was a serious issue, while 5.19% indicated that high fees imposed by exchanges were a significant factor affecting their trading experience.
Calls for Tax Rate Adjustments
As the survey explored preferences for tax rates on crypto investments, nearly 44% of investors suggested that a lower tax rate between 0-10% would be more equitable. Approximately 32.5% of respondents supported a moderate tax range of 10-20%. A smaller segment, 6.49%, indicated a preference for a 20-30% tax rate, whereas 17.5% of participants believed that capital gains from crypto investments should not be taxed at all.
Furthermore, the survey indicated that a majority of 66.23% of respondents are in favor of taxing crypto investments under the same principles as short-term and long-term capital gains in equity trading. Only 33.77% of participants disagreed with this approach.
Flexibility in Offsetting Gains and Losses
In a strong expression of the need for flexibility within the tax framework, a resounding 89.6% of respondents expressed their desire for the ability to offset losses against gains, akin to the existing provisions for equity investors. Only 10.4% opposed this suggestion, highlighting a broad consensus among investors for more favorable conditions in the taxation of cryptocurrencies.
Implications for the Upcoming Union Budget
The findings from the Mudrex survey underscore a mounting demand for reform in how cryptocurrency investments are taxed in India. With the general sentiment leaning toward lower tax rates and the introduction of mechanisms to offset losses, the Union Budget 2025 is likely to face heightened scrutiny regarding these issues.
As the popularity of crypto trading continues to surge in the country, it remains to be seen whether the government will respond to these calls for a tax overhaul that aligns with the expectations and preferences of investors. The outcome of these discussions may significantly influence the future landscape of cryptocurrency investment in India.
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