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What is the story about?
Nearly 90% of crypto investors in India are aware of the country’s current taxation rules, but two-thirds believe the framework is unfair, according to a nationwide survey released by CoinSwitch ahead of the Union Budget in February.
The survey shows strong familiarity with key provisions governing virtual digital assets (VDAs), including the 30% tax on gains, the restriction on loss set-off or carry-forward, and the 1% tax deducted at source (TDS) on transactions. Despite this high level of awareness, 66% of respondents said the existing tax structure does not adequately reflect market realities.
Taxation appears to be influencing investor behaviour. About 59% of respondents reported reducing their participation in crypto investing or trading due to the prevailing tax regime. The findings suggest that current policies may be affecting trading volumes, liquidity, and onshore market activity.
At the same time, 17% of respondents said their participation increased despite the tax structure, while 16% indicated no change in activity. These investors pointed to a longer-term investment approach, suggesting that regulatory certainty matters more than short-term tax considerations for certain market participants.
The survey also highlights growing demand for a predictable and market-aligned tax framework. A majority of respondents said they were not seeking tax exemptions but rationalisation, including lower tax rates, provisions for loss set-off, reduced TDS, and clearer regulations aligned with established financial markets.
There is also strong support for integrating crypto into India’s mainstream financial system. Around 61% of respondents believe crypto should be taxed similarly to equities or mutual funds, while 17% prefer a separate tax framework. The preference indicates an inclination toward parity with traditional financial instruments.
On information sources, crypto platforms and exchanges emerged as the primary channel for updates on taxation and regulation, cited by 30% of respondents. News media followed at 27%, while 25% relied on social media, underscoring the role of platforms and media in investor awareness.
Beyond taxation, regulatory clarity remains a key concern. Over 80% of respondents said clear regulations are important, with 60% describing them as extremely important. More than half of those surveyed believe crypto should be encouraged as a new asset class in India, reflecting a broader policy sentiment that favours enablement over restriction.
The survey shows strong familiarity with key provisions governing virtual digital assets (VDAs), including the 30% tax on gains, the restriction on loss set-off or carry-forward, and the 1% tax deducted at source (TDS) on transactions. Despite this high level of awareness, 66% of respondents said the existing tax structure does not adequately reflect market realities.
Taxation appears to be influencing investor behaviour. About 59% of respondents reported reducing their participation in crypto investing or trading due to the prevailing tax regime. The findings suggest that current policies may be affecting trading volumes, liquidity, and onshore market activity.
At the same time, 17% of respondents said their participation increased despite the tax structure, while 16% indicated no change in activity. These investors pointed to a longer-term investment approach, suggesting that regulatory certainty matters more than short-term tax considerations for certain market participants.
The survey also highlights growing demand for a predictable and market-aligned tax framework. A majority of respondents said they were not seeking tax exemptions but rationalisation, including lower tax rates, provisions for loss set-off, reduced TDS, and clearer regulations aligned with established financial markets.
There is also strong support for integrating crypto into India’s mainstream financial system. Around 61% of respondents believe crypto should be taxed similarly to equities or mutual funds, while 17% prefer a separate tax framework. The preference indicates an inclination toward parity with traditional financial instruments.
On information sources, crypto platforms and exchanges emerged as the primary channel for updates on taxation and regulation, cited by 30% of respondents. News media followed at 27%, while 25% relied on social media, underscoring the role of platforms and media in investor awareness.
Beyond taxation, regulatory clarity remains a key concern. Over 80% of respondents said clear regulations are important, with 60% describing them as extremely important. More than half of those surveyed believe crypto should be encouraged as a new asset class in India, reflecting a broader policy sentiment that favours enablement over restriction.
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