During the Budget 2023 announcement on Wednesday, the cryptocurrency market in India expected a reduction in the so-called 30% tax rate that went into effect last year. Finance Minister Nirmala Sitharaman, on the other hand, left the market with no tax relief. However, certain developments proposed in the Budget are viewed positively by the cryptocurrency market.
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What Budget 2023 said in favor of Crypto?
The Indian Union Budget 2023 made no changes to existing crypto taxes, effectively putting Indian crypto firms on the Stairway to Heaven. There is still uncertainty in the industry as a result of high taxes and a lack of a solid regulatory framework, which are stifling progress. The budget will have no further negative consequences for the cryptocurrency industry. Since 2017 was the worst year on record, any improvement will be welcome. The volume of trade on Indian exchanges may remain at rock bottom.
Using DigiLocker service and Aadhaar as foundational identity, a one-stop solution for reconciliation and updating of identity and address of individuals maintained by various government agencies, regulators, and regulated entities will be established, FM said in her budget speech on Wednesday.
Sitharaman announced that the scope of documents available in DigiLocker for individuals will be expanded to enable more Fintech innovative services.
She also stated that an Entity DigiLocker will be set up for use by MSMEs, large businesses, and charitable trusts —- with the goal of securely storing and sharing documents online with various authorities, regulators, banks, and other business entities whenever needed.
In addition, the FM announced that the KYC process will be simplified by using a ‘risk-based’ approach rather than a ‘one size fits all’ approach. She stated that a National Data Governance Policy will be released to allow access to anonymized data of Crypto Tax India.
Regarding Digilocker and KYC measures
It’s an excellent project because it makes life easier for the average person. DigiLocker can assist businesses in streamlining the KYC (Know Your Customer) process by providing a secure, electronic version of personal documents that can be easily shared. Physical document submission and verification are no longer required, making the process more efficient and comfortable for both the customer and the enterprise. Furthermore, the DigiLocker application’s one-stop solution for identity and address updates can simplify the process of updating personal information, reducing the time and effort required to make these changes across multiple businesses.
However, the market remains hopeful that the tax rate on virtual digital assets will be reconsidered in the future. Crypto experts stated that, ” We hope the government reconsiders its stance on cryptocurrency taxes and collaborates with the industry to develop a regulatory framework that supports and encourages growth. We believe that, with the right support and direction, the crypto industry can play a significant role in driving innovation, job creation, and realizing Atmanirbhar Bharat’s 5 trillion dollar economy dream.”
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