#CryptoTariffDrop The global landscape of cryptocurrency taxation is witnessing significant shifts as various jurisdictions reevaluate their tax policies to foster growth and innovation in the digital asset sector.

India's Stance on Crypto Taxation

In India, the cryptocurrency industry has been advocating for a reduction in the Tax Deducted at Source (TDS) on virtual digital assets (VDAs) from the current 1% to 0.01%. Industry bodies argue that the existing TDS rate hampers market liquidity and drives investors to offshore platforms. Despite these appeals, the Union Budget 2024 did not introduce changes to the crypto tax regime, maintaining the status quo and leaving industry stakeholders seeking further dialogue with policymakers.

International Developments in Crypto Taxation

Globally, other financial hubs are adopting more accommodative tax policies for cryptocurrencies:

Hong Kong: In November 2024, Hong Kong proposed tax exemptions on gains from cryptocurrencies for private equity funds, hedge funds, and family offices. This initiative aims to position Hong Kong as a leading offshore finance hub and attract digital asset investments.

Italy: In December 2024, Italy announced plans to scale back a proposed tax hike on cryptocurrency capital gains. Initially set to increase from 26% to 42%, the revised plan aims to significantly reduce the tax rate following industry feedback, reflecting a more balanced approach to crypto taxation.