Web3’s Tax Struggle: Hope or Despair? 🚀

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Key Highlights

  • Chenoy proposed reducing the current 1% TDS on virtual digital assets to 0.1% to maintain transaction tracking while restoring market liquidity. 🌍💸
  • The industry is seeking the ability to offset losses against gains across different digital asset transactions to align with standard financial practices. 📉📈
  • Providing regulatory clarity and tax certainty is essential to prevent the migration of Indian Web3 talent and capital to offshore jurisdictions. 🏙️✈️

In the shadow of a vast, uncharted digital frontier, Bharat Web3 Association’s Dilip Chenoy stood before a gathering of government advisors and economists, his voice a whisper of hope in a world of red tape. The air crackled with the weight of unspoken fears-of a sector teetering on the edge of exile. 🌪️

Chenoy spoke of the “Viksit Bharat” vision, a dream etched in the minds of dreamers, yet the path was paved with taxes as heavy as a mountain. “We need rationalization,” he said, “not a game of Russian roulette with our future.” 🎯

At the Pre-Budget Discussion webinar organised by the @EgrowFoundation, our Chairperson, @DilipChenoy, outlined key industry priorities for the Web3 and Virtual Digital Asset ecosystem.

He highlighted the need for rationalisation of VDA taxation, along with the establishment of…

– Bharat Web3 Association (@BWA_Ind) January 7, 2026

Driving GDP through manufacturing and services

Chenoy addressed the fiscal concerns the industry faces today while aiming for 25% of the GDP for manufacturing and new services. He spoke of fair taxation as a lifeline, a thread to hold onto in a storm of complexity. “Simplify,” he urged, “or watch our innovators flee like deserters.” 🧩

High tax rates and a labyrinthine system, he argued, were not just obstacles-they were traps. “Every rule is a wall, every tax a chain,” he said, “and we’re all swimming upstream.” 🚽

Proposals for working capital

One proposal was to exempt B2B payments from TDS and TCS, a move Chenoy likened to “freeing a caged bird.” “Let them fly,” he implored, “and watch the economy soar.” 🦜

“Tax certainty,” he said, “is the compass we need. Even with Mr. Sajjit Pai present, we must encourage investment-like a farmer sowing seeds in a drought.” 🌱

The chairperson also discussed the need to adjust specific tax rates that apply to the sector. “For India to unlock its economic potential,” he said, “tax policy must be a bridge, not a barrier.” 🌉

The impact of current fiscal policies

Chenoy noted that the VDA industry, once a beacon of promise, now groaned under the weight of a 30% flat tax and 1% TDS. “They’re trading on foreign shores,” he said, “as if the moon holds better luck.” 🌙

This practice, he argued, made the sector “a ghost in the machine,” hiding from regulators and stifling growth. “A nation cannot lead in tech if its children are fleeing to foreign lands,” he warned. 🏁

Reversing the Web3 brain drain

These recommendations, Chenoy claimed, could reverse the “brain drain” of Web3 talent. “If the Ministry of Finance listens,” he said, “we might see a renaissance of innovation-like a phoenix rising from the ashes of bureaucracy.” 🦅

“Let’s not let our future be written by those who fear progress,” he added. “Tax policy should be a ladder, not a wall.” 🪜

Strengthening India’s global tech position

By addressing the issues, Chenoy said, India could “claim its place under the global tech sun.” “Extend this to new manufacturing units,” he urged, “and watch our economy bloom.” 🌸

Yet, he acknowledged, the road is long. “We’ve taken steps,” he said, “but the journey is just beginning. Will the Union Budget be our ally or our adversary?” 🚶‍♂️

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2026-01-07 20:20