With the Union Budget 2026 just around the corner, India’s crypto ecosystem is looking at the centre for a much-needed course correction. After years of
operating under one of the world’s toughest tax regimes for virtual digital assets (VDAs), industry leaders are calling for policy changes that could reignite domestic participation, improve compliance, and create room for sustainable innovation. While the government’s 2022 decision to bring crypto under the tax net marked a major step for legitimising the sector, steep levies have since dampened trading volumes and driven users toward overseas platforms. Experts believe that Budget 2026 can rewrite the next chapter of India’s crypto story. Talking about what the industry expects, Nischal Shetty, Founder, WazirX, said, "As India prepares for Budget 2026, there is a clear opportunity to fine-tune a framework which supports transparency and compliance while fostering innovation. The current framework needs to be reconsidered in lines of how Web3 has matured over the last couple of years globally, both in adoption and institutional participation driven by an evolving regulatory environment." Calibrated Reduction In Transaction-Level TDS He added that a calibrated reduction in transaction-level TDS and a review of loss set-off provisions could help restore onshore liquidity, improve compliance, and ensure that more economic activity remains within India’s regulated perimeter, without compromising oversight or enforcement. "Clear guidelines on permissible activities, compliance standards, and reporting obligations, such as the latest guidelines issued by FIU for exchanges operating in India, will strengthen investor confidence and help build a sustainable digital asset ecosystem. With the right policy, the crypto industry could help India achieve a 5 trillion dollar economy target," Shetty added. Tax Rationalisation Vikas Gupta, Country Manager- India, Bybit, noted that Budget 2026 presents a pivotal opportunity for India to clearly signal its ambition of becoming a future-ready digital economy by aligning regulation with innovation-led growth. "Rationalising the existing 30 per cent tax on virtual digital assets and revisiting the 1 per cent TDS by reducing it to a more practical level, such as 0.1 per cent would help bring users back into the regulated domestic ecosystem, improve compliance, and support stronger market liquidity. A balanced and progressive tax framework would incentivise long-term participation over short-term speculative activity, strengthen transparency, and enhance investor confidence," he opined. As global markets increasingly adopt differentiated and pragmatic approaches to crypto taxation, it is important for India to remain competitive and innovation-friendly. "A supportive and forward-looking policy environment can accelerate Web3 innovation, foster blockchain-based entrepreneurship, generate high-quality jobs, and firmly position India as a global hub for digital assets and next-generation financial technologies," he added. Consistant Framework Raj Karkara, COO, ZebPay, noted, "A clear and consistent framework for digital assets would help strengthen trust among investors, institutions, and market participants, while enabling businesses to operate responsibly within well-defined boundaries. From a taxation standpoint, a rationalisation of the current 1 per cent TDS on crypto transactions could meaningfully improve liquidity and encourage stronger onshore participation, while a review of the flat 30 per cent tax on VDA gains, aligned with other asset classes and allowing for loss set-offs, would create a more balanced and predictable investment environment." He further added that greater policy clarity could also unlock new lines of innovation-led businesses, enabling India’s vibrant Web3 ecosystem and deep pool of developers and technology talent to be utilised more effectively and scaled more responsibly. "At the same time, a more welcoming and well-defined regulatory framework would allow India to participate more actively in the global crypto economy, align with international standards, and reinforce confidence that policy is actively guiding the sector, encouraging wider participation and access to global opportunities. Globally, this would further strengthen India’s significance in the digital asset sector," he said.
