The Central Board of Direct Taxes (CBDT) has initiated dialogue with cryptocurrency exchanges regarding proposed regulations for virtual digital assets.
CBDT Engagement
CBDT has reached out to cryptocurrency exchanges asking for their opinions on several key issues related to regulation. Key topics for discussion include the creation of an appropriate law for virtual digital assets, reviewing the current 1% TDS on crypto transactions, and allowing traders to offset losses against gains.
Issues in the Crypto Industry
According to a report by Esya Centre, around 3 to 5 million Indian users have shifted their trading to overseas exchanges due to the introduction of the TDS rule in 2022. This has raised significant concerns about capital outflow and loss of business for local platforms.
Future of Regulation in India
The initiative by the CBDT is seen as a step towards more balanced and inclusive regulation of the crypto industry in India. Continued dialogue and a potential reduction in TDS are expected to create a safer and more stable environment for cryptocurrency trading.
These actions by the CBDT are viewed as a sign of the government's willingness to adopt a more mature approach to cryptocurrency regulation, which may lead to fairer tax norms and improved business conditions in the sector.
