As the Union Budget 2026 approaches, India’s crypto industry is hoping for a reset in taxation and regulation to revive domestic activity, boost transparency, and support long-term innovation in virtual
digital assets (VDAs).
Call for balanced taxation
Industry leaders agree that while the government’s 2022 move to tax crypto gave the sector formal recognition, high taxes have slowed market activity and pushed users to offshore platforms.
Vikas Gupta, Country Manager–India at Bybit, said the 30% tax on crypto gains has helped establish oversight and compliance. However, he noted that market participation has moderated as traders look for lower-cost platforms overseas.
According to Gupta, Budget 2026 is a chance to reinforce India’s position as a digital-first economy by combining innovation with sensible regulation. A review of the 30% tax rate, he believes, could improve investor confidence, increase onshore participation, and strengthen trust in regulated Indian platforms.
TDS cut tops wish list
Another major pain point for the industry is the 1% tax deducted at source (TDS) on every crypto transaction. Market players say this has hit liquidity and trading efficiency.
Edul Patel, CEO of Mudrex, said Indian crypto investors are now more disciplined and focused on long-term value rather than hype-driven trades. However, he pointed out that the high TDS has driven trading offshore, reducing transparency within the domestic ecosystem.
Patel suggested reducing TDS to 0.1% and allowing investors to offset losses against gains. This, he said, would lower friction, enable better portfolio management, and support a compliant and sustainable crypto market in India.
Clarity, compliance and global ambition
Sumit Gupta, Co-Founder of CoinDCX, echoed similar views, stressing the need for pragmatic reforms as the current tax framework completes four years.
He said uniform implementation of TDS across all exchanges is critical to improve compliance and protect users from non-compliant operators. Reducing TDS to as low as 0.01%, according to him, would still allow monitoring while removing the main incentive for offshore migration.
Gupta also called for aligning the 30% capital gains tax with income tax slabs, permitting loss offsetting, and allowing standard business deductions for Web3 ventures. Such steps, he said, could help India attract global capital, create skilled jobs, and emerge as a leading hub for Web3 and blockchain innovation.
Overall, the industry is looking to Budget 2026 for signals that India is ready to support a transparent, competitive, and future-ready crypto ecosystem.
