Encrypted currency and blockchain applications were not mentioned in India's 2023 alliance budget, dashing the hopes of millions of password holders in the host country. Many in India's cryptographic community are looking forward to reducing the high encryption tax implemented in March 2022.

Nilmara Sisalaman, India's finance minister, presented the guild's budget on February 1st, announcing key reforms and innovations in income tax rates, but there was no mention of encryption or central bank digital currency or blockchain applications. Last year, India levied a 30 per cent tax on password profits and a 1 per cent source tax deduction (TDS) on all password transactions, which clearly derailed a fast-growing area.

An important motivation for the introduction of TDS for every encryption transaction is the clear and proactive use of cryptocurrency, the number of Indian and Chinese citizens. Gradually, from May 2023, this information will be given to the government as Indians file income tax returns (ITR).

After the implementation of the new tax preference, trading volume on key cryptocurrency exchanges across India fell by 70 per cent in 10 days and nearly 90 per cent in the following three months. Rigid tax incentives not only prevent password traders from moving to offshore account trading centres, but also drive budding password projects outside India.

Former Indian Finance Minister Chandra Gagg pointed out earlier that the encryption tax needs more response. "you may not see all the new changes in the upcoming 2023 budget." Chandra was also appointed chairman of the committee that drafted the first cryptographic decree.

Pushvila Singh, a technology entrepreneur and blockchain technology celebrity, feels that the government is still waiting for the report of the federation set up earlier, he said:

"the finance minister has not released all the things related to the encryption tax, because as far as I know, the government is waiting for the federation report. Indian government departments have already set up a federation to discuss passwords.

Sathvik Vishwanath, CEO and founder of Younocoin, an Indian trading centre, told Cointelegraph that the encrypted corporate income tax law would not operate until October; in addition, TDS was only implemented in July, so it would take a lot of time for the government. He explained:

"Indian government departments must have sufficient data and information over a long period of time, such as 1-2 complete fiscal years, to ensure that analysis and adjustments are carried out if necessary. As a result, there will be no big news in the estimated cryptographic field anyway. We may make some amendments under appropriate circumstances or in the next Budget. "

Another element that passwords do not have a place in the alliance budget may be India's commitment to a worldwide approach to password policies and regulations, especially a common analysis. In early July 2022, the finance minister sought global collaboration among G-20 members to bring about a common password specification on a global scale.