The crypto community is disappointed with no tax burden and TDS reduction announced by India’s Finance Minister Nirmala Sitharaman in the first session of the Union Budget 2023. The finance minister revealed big changes in the tax slabs, reducing the tax liability under the new regime.
Income Tax Changes Announced in Budget 2023
During the Budget 2023, Indian Finance Minister Nirmala Sitharaman said the “new income tax regime” will now be the default regime. Nirmala Sitharaman announced huge changes in income tax that would benefit people and help under present conditions of inflation.
Under the new income tax regime, the income tax rebate limit is increased from Rs 5 lakh to Rs 7 lakh. The government also extended benefits of the standard deduction for salaried class and pensioners. The income tax slabs in the new regime are as follows:
- Tax for income of Rs 0-3 lakh is nil
- Income above Rs 3 lakh and up to Rs 5 lakh is to be taxed at 5%
- Income of above Rs 6 lakh and up to Rs 9 lakh is to be taxed at 10%
- Income above Rs 12 lakh and up to Rs 15 lakh is to be taxed at 20%
- Income above Rs 15 lakh is to be taxed at Rs 30%.
Indian finance minister asserts that income tax changes are made considering relief for the middle class. However, many claim the development-focused budget is for the upper class, making them boost consumption and drive growth. Also, conditions in the new tax regime caused people to move away from it earlier and stick to old tax regime.
Are Tax Changes Good for the Crypto Community in India?
While the Indian crypto community expected relief in 30% crypto tax and 1% TDS, the increase in income tax rebate limit has provided some relief for the crypto community. The community was already aware that government may not revise the tax policy on cryptocurrencies this budget year.
India’s youth and people with financial literacy are only investing in cryptocurrencies, which generally fall under higher tax slabs. Moreover, proof-of-reserves (PoR) reports by CoinDCX and WazirX have revealed that Indian investors are mostly investing in crypto such as Shiba Inu, Dogecoin, and Polygon (MATIC), which have low prices. Only a few people are investing in Bitcoin and Ethereum.
The government is taking a cautious approach to regulating crypto following the collapse of the crypto exchange FTX.
Also Read: India Crypto Ecosystem Let Down With No Reduction In Tax
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