India’s Crypto Tax Policy: Hopes for Rationalisation in 2026
The Indian cryptocurrency industry is at a pivotal crossroads as the Union Budget 2026 approaches. Stakeholders in the sector are urging the government to revisit the current taxation policies to foster growth and ensure sustainability within the market.
Calls for Change in the Current Taxation Framework
The crypto community is advocating for the rationalisation of the 30% capital gains tax and seeking permission to offset trading losses, which could align tax practices with global standards. Furthermore, the industry is calling for a review of the 1% tax deducted at source (TDS) on crypto transactions — an area identified as a significant deterrent for traders and investors.
A recent report by KoinX underscores the necessity for these changes. Titled ‘India’s Crypto Tax Story 2025,’ the study analyses anonymised data from over 700,000 Indian crypto users during FY 2024–25. It reveals key discrepancies between the current tax laws and actual investor experiences, advocating for a shift toward a more equitable tax system.
Industry Leaders Speak Out
Manhar Garegrat, Country Head–India at Liminal Custody, highlighted the pressing need for reform, suggesting that hefty taxes on individual transactions are driving crypto traders offshore. Garegrat proposed adopting a Virtual Digital Asset (VDA) transaction tax model, which could retain crypto trading within India’s regulatory framework. Market experts believe that such changes could create transparency and economic viability in the evolving ecosystem.
Shifting Towards Clarity and Sustainability
While crypto taxation has been a contentious topic, expectations are growing for the government to prioritise rationalisation of existing terms rather than expanding tax liabilities. For example, simplifying processes around loss offsets or TDS could potentially reinvigorate cryptocurrency trading within the country.
For the average crypto enthusiast, these changes could mean opportunities to actively trade without the fear of disproportionate tax burdens. As the government remains tight-lipped on potential reforms, industry insiders and traders await with cautious optimism.
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The Road Ahead
With the Union Budget 2026 fast approaching, it remains to be seen whether India’s policymakers will take tangible steps to address the crypto industry’s demands. By embracing a long-term vision and creating a crypto-friendly tax structure, India has the potential to strengthen its position as a global fintech leader.
Stay tuned for more updates on cryptocurrency trends, policies, and investment opportunities as we navigate the evolving financial landscape.
