Union Budget 2022: Indian Startup Founders & Investors Hail Crypto Tax

Union Finance Minister Niramala Sitharaman today presented the Union Budget 2022. In her speech, she claimed that this year’s Budget will lay parallel track of a blueprint for Amrit Kaal – which will directly benefit youth, farmers, SCs and STs and big public investment for modern infrastructure, readying India at 100 years of independence.

The Finance Minister at the onset of her speech reiterated how fintech startups are empowering digital payment, which is helping India lead towards Atmanirbhar Bharat. However, the imposition of 30% tax on income of crypto and NFTs was one of the major takeaways from the Budget.

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Welcoming the 30% tax imposition on crypto income along with NFTs, startup founders shared their reactions through different posts: Here’s a look at who said what on Twitter:

Nischal Shetty, founder and CEO of WazirX tweeted saying that he hopes the Budget 2022 will assuage fear of crypto ban among citizens. 

Hope to see a reduction of crypto ban fear in India

India just taxed crypto ?

Lot to unpack here but overall this is a very positive step forward for crypto ecosystem in India ??#IndiaWantsCrypto

— Nischal (WazirX) ⚡️ (@NischalShetty) February 1, 2022

Sumit Gupta, cofounder and CEO of CoinDCX wrote on the micro blogging site that taxation of virtual digital assets or crypto is a step in the right direction. 

Taxation of Virtual Digital Assets or #crypto is a step in the right direction. It gives a lot of clarity
India’s focus on digital innovation and promotion of blockchain is welcome
The details need to be studied to comment further
But it’s great news for crypto investors in India

— Sumit Gupta (CoinDCX) (@smtgpt) February 1, 2022

 

Ashish Singhal of Coinswitch Kuber tweeted that crypto is not under shadows anymore. 

Crypto was in the shadows for a long time. Not anymore. This legitimises the whole industry and sends a positive signal about building in India.

— Ashish Singhal (CoinSwitch Kuber) (@ashish343) February 1, 2022

Sumit Ghosh of Chingari expressed his happiness by tweeting– India has officially legalised crypto and said that innovation by crypto startups will follow. 

This is the first step towards – India officially legalises crypto! Imagine the kind of innovation now Indians crypto startups will do! Now that’s it’s legal and taxed!

— Sumit Ghosh (@sumitgh85) February 1, 2022

Nitin Sharma of Antler Global commented on the definition of ‘digital assets’.

The real win IMHO:
Finally the framing in terms of “digital assets” (which can be regulated and taxed)

vs. terming everything “private cryptocurrency” (which understandably scare people towards a ban).

Many of us have been saying this since 2018…

#Budget2022 #Crypto

— Nitin Sharma (@nitinsharma1) February 1, 2022

Sriram Krishnan, who joined as a general partner in a16Z recently tweeted saying that it was interesting to see the Budget’s take on crypto.

Really interesting to see the Indian budget’s take on crypto (“virtual digital assets”).

(just catching up with all the tweets on this)

— Sriram Krishnan – sriramk.eth (@sriramk) February 1, 2022

Suumit Shah, cofounder of retail tech startup Dukaan tweeted that there is a huge potential in India to build crypto tax software.

Huge potential to build a crypto tax software for India now! https://t.co/BeqL6HgDii

— Suumit Shah (@suumitshah) February 1, 2022

The government has also proposed to launch its much anticipated sovereign-backed central bank digital currency (CBDC)  or ‘digital rupee’ in 2022-2023.

Paytm’s founder Vijay Shekhar Sharma, who is quite popular on Indian Twitter space supported the move with his tweet too. 

#CBDC जय हो ! ??
What an incredible announcement of #Budget2022 ???

— Vijay Shekhar Sharma (@vijayshekhar) February 1, 2022

Raajeev Mantri of Navam Capital shared similar enthusiasm as he tweeted:

Introduction of CBDC! Here comes the Digital ₹, using blockchain and other technologies starting this FY. #Budget2022

— Rajeev Mantri (@RMantri) February 1, 2022

Neeraj Khandelwal of CoinDCX also voiced his support for CBDC in a tweet and said the move is a clear signal for a digital-first, efficiency-driven,and transparency-led system.

The introduction of CBDC sends a clear signal of India being a digital-first, efficiency-driven, and transparency-led system.

CBDC with the backbone of Blockchain will help us hold a powerful position in the global economy.

We welcome this visionary move.#Budget2022

— Neeraj, CoinDCX (@nrjkhandelwal) February 1, 2022

 

Kunal Bhal, founder of IPO-bound ecommerce major Snapdeal, called the introduction of CBDC as “monumental step” in his tweet.

The significance of this step is monumental. For an economy of India’s size and global influence to make a formal push into a digital currency is going to be truly transformational.#web3 #Blockchain https://t.co/qMo2ABPhpX

— Kunal Bahl (@1kunalbahl) February 1, 2022

Ashsih Fafadia of Blume Venture giving an overview of the Budget highlighted that allocation for drones, digitisation of records, connecting post offices of 2 Cr banking solutions can be big enablers for the rural and underserved economy of the country. He further supported the government’s push for EV that was reflected in the Budget.

Climate Change is an area where India is not paying lip service is evidenced with allocations on clean energy, battery swapping infra, solar infra, EVs. As we push hard on mfg and growth, we will hopefully bal with initiatives on Climate initiatives @BlumeVentures (4/5)

— Ashish Fafadia (@AshishFafadia) February 1, 2022

It was surprising not to see any tweet from the founders of popular EV startups in the country, Bhavish Aggarwal of Ola Electric and Tarun Mehta of Ather Energy on the Budget announcement. 

As in the Budget, the finance minister said that, “The private sector will be encouraged to develop sustainable and innovative business models for ‘Battery or Energy as a Service’. This will improve efficiency in the EV ecosystem.” 

Further, in her Section B of the speech, there was a separate mention of ‘Incentives for Startups’. Under the topic, the FM mentioned that startups have emerged as drivers of growth for India’s economy. The government has taken cognisance of the impact startups have created during the pandemic. 

The government has earlier stated that startups established before 31 March of 2022 have been provided a tax incentive for three consecutive years out of ten years from the date of incorporation. However, the government has now proposed to extend the period of incorporation to one year for eligible startups, i.e., to 31 March of 2023. 

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