The sector of cryptocurrencies in India has reached a decisive point. Crypto Tax India Reform has become louder as the development of unfavourable tax policy forces businesses and their users to move abroad. Former policymakers and crypto entrepreneurs are the leaders in demanding lower tax rates, more transparent regulations, and more intelligent policies to protect India and the rest of the world in Web3 economic territories.
🇮🇳 India’s Current Crypto Tax Landscape
The crypto industry in India is currently weighed down by:
- 30% flat tax on crypto gains, without consideration for holding duration
- 1% TDS on all transactions above ₹10,000 (or ₹50,000 for certain users)
- No loss offset, unlike equities or mutual funds
- Penalties of non-conformance, such as interest and fines, should be heavy.
- The mandatory reporting of Virtual Digital Assets (VDA) to the new Schedule VDA regulations by FY 2025 26.
- This tax system, which began to operate in 2022 and remained in effect in the middle of 2025, brought about displeasure on a widespread scale.
Industry Impact: A Sector Under Pressure
- Trading volumes on Indian platforms have plummeted, as over 90% of crypto activity has shifted to offshore exchanges.
- Domestic exchanges like WazirX and CoinDCX have lost significant market share.
- According to a Mudrex survey, 85% of Indian crypto investors believe that the tax system needs immediate reform.
- New crypto startups are relocating to Dubai, Singapore, or Europe, leading to capital and talent flight.
Who’s Calling for Reform?
A growing coalition of stakeholders is now demanding change:
- Former Indian MP Dr. Rajeev Gowda has publicly urged tax cuts and regulatory clarity to foster Web3 innovation.
- Top executives at Indian exchanges warn that without reform, India risks becoming irrelevant in the global crypto space.
- Think tanks and fintech policy groups are pushing for a graduated tax structure and TDS reduction to support liquidity.
What Changes Are Being Proposed?
Here’s what the crypto industry wants:
| Current Policy | Suggested Reform |
| 30% tax on gains | Reduce to 10–20% |
| 1% TDS | Lower to 0.01% or remove entirely |
| No loss offset allowed | Allow set-off against capital losses |
| Vague or fragmented regulations | Clear framework via new legislation |
The COINS Act 2025 – A Possible Game-Changer?
There is growing anticipation for the Crypto Oversight and Innovation in Securities (COINS) Act 2025, which may include:
- Elimination of the 30% capital gains tax on crypto
- Creation of a Crypto Asset Regulatory Authority (CARA)
- Encouragement of self-custody and onshore trading
While it hasn’t been passed yet, industry insiders say the act could be introduced during the Winter Session of Parliament.
How India Compares Globally
- Singapore, UAE, and Germany offer far more favorable tax conditions for crypto investors.
- The EU’s MiCA framework emphasizes investor protection and innovation.
- The U.S. is also pivoting pro-crypto under new leadership, prompting India to reconsider its own position.
Why Reform Is Urgent
- To stop capital flight and encourage local exchange usage
- To boost investor confidence and innovation in blockchain startups
- To align with global standards for digital asset taxation
- To meet compliance goals set by the OECD’s Crypto Asset Reporting Framework (CARF)
Conclusion
India’s crypto sector is at a crossroads. The current tax regime has discouraged domestic participation and driven innovation abroad. But with mounting pressure from all corners politicians, businesses, and investors alike there’s renewed hope that 2025 could mark a turning point for crypto regulation in India.