Experts and industry stakeholders in India are urging the government to reconsider the current cryptocurrency tax framework in the upcoming financial budget due to a rapid increase in offshore trading activities. The decline in domestic crypto transactions and capital outflows from local exchanges are undermining regulatory oversight and impacting the government’s revenue. Despite growing popularity, strict and complex tax regulations are prompting many investors and traders to move their operations abroad to jurisdictions with more lenient tax laws. This trend not only weakens the domestic crypto market but also adversely affects government income. Experts emphasize the need for a simplified and acceptable tax system to enhance transparency and regulation in crypto trading, encouraging investors to remain within the national market and maintain capital flow. Strengthening the financial health of local crypto exchanges and improving services for users are also critical to reducing the shift toward foreign markets. This presents a crucial opportunity for the government to implement effective reforms in the financial budget to foster industry growth while ensuring fiscal transparency and tax collection. Failure to act may result in India lagging behind in the global crypto market as investors prefer other countries. Observing international approaches, India needs to adopt flexible policies that enable the crypto sector to contribute positively to the national economy.
Source: decrypt
