Investors expect that the crypto tax may continue as Nirmala Sitharaman returns as the finance minister

India concluded its general election on June 1, and last week’s results paved the way for Narendra Modi’s re-election as prime minister for a third consecutive term. As part of Prime Minister Modi’s newly constituted cabinet, Nirmala Sitharaman has been reappointed as the country’s finance minister after first taking charge of the ministry in 2019. India’s crypto community has expressed mixed reactions to Sitharaman’s re-appointment as finance minister.

Cryptocurrencies in India have been under the scanner of the Finance Ministry. From 2022, all profits from crypto transactions in India are subject to a 30 percent tax, while a 1 percent tax deducted at source (TDS) applies to the transfer of virtual digital assets (VDA).

Dilip Chenoy, president of the Bharat Web3 Association (BWA), congratulated the new government and said that the Web3 Advisory Group will continue to work with officials to encourage the growth of Web3.

“At BWA, we remain committed to working with the government to foster the growth and development of the Web3 sector, with the aim of establishing India as a global hub for Web3. We look forward to our continued engagement and support for the government to develop forward-looking regulation that promotes innovation while prioritizing consumer protection in the ever-evolving Web3 space,” Chenoy wrote on LinkedIn.

The Indian crypto circuit has been waiting for FM Sitharaman to revise the tax laws imposed on the crypto sector. Despite the outcry, the finance minister did not announce any tax breaks for the crypto sector when presenting the interim annual budget earlier this year.

Her re-appointment as finance minister has raised concerns among India’s crypto community, which fears there are no tax reforms in store for the digital asset industry. Many expressed their opinion on the development on social networks.

External Affairs Minister Sitharaman is expected to present the full budget for the fiscal year 2024-25 next month. Crypto commentators expect the finance minister to reduce the one percent TDS on every crypto transaction to 0.01 percent as part of her upcoming budget presentation.

In March this year, Sitharaman said that India does not see any cryptocurrency as a ‘currency’ option. At the time, Sitharaman said that “assets created in the name of crypto can be assets for trading, assets for making money, and assets for many other things.”