India’s Crypto Sector Pushes for Tax Relief as Budget 2026 Nears

TLDR

• India’s crypto firms seek lower TDS to revive shrinking onshore trading volumes
• Industry urges review of 30% gains tax to support long-term market growth
• Executives say high taxes push users toward offshore and unregulated platforms
• New KYC and reporting rules raise compliance costs for domestic exchanges
• Budget 2026 may bring limited tax tweaks as revenue concerns shape policy

India’s crypto industry renewed its appeal for lighter tax rules as the government prepared Budget 2026, and the sector pressed for changes to restore activity. India’s crypto industry argued that high transaction taxes limit participation and shift activity offshore. India’s crypto industry maintained that ongoing compliance expansion strengthens oversight yet still demands balanced taxation.

Exchanges Renew Calls for Tax Adjustments

India’s crypto industry urged authorities to revise the 1% TDS because platforms report declining domestic activity. The industry also sought a review of the 30% tax on gains since current rules restrict long-term market growth. The proposals highlighted how tighter oversight supports supervision but still requires a fair tax structure.

Executives stated that lower frictions would support regulated trading because users often avoid high-cost execution. They added that loss setoffs would create predictable conditions and support safer participation. They argued that new rules should complement compliance upgrades already in force.

Sector leaders noted that India’s crypto industry matured as global markets adopted clearer standards. They stressed that domestic frameworks must match international norms because India aims to expand digital growth. Additionally, they said that improved clarity would support new operational models across the expanding Web3 environment.

Regulatory Shifts Add Pressure on Platforms

Authorities introduced detailed KYC procedures that require live verification and expanded data collection since officials aim to strengthen monitoring. These rules now cover identity checks, geographic tracking, and tax identifiers because regulators expect full compliance. Platforms must update internal systems to match new reporting obligations.

India’s crypto industry said these measures build a structured environment that aligns with broader regulatory goals. The industry argued that compliance rules now demonstrate operational readiness across domestic exchanges. The sector claimed that improved governance supports tax reform without weakening supervision.

Tax departments warned lawmakers that offshore platforms complicate monitoring because cross-border transfers reduce visibility for enforcement. They also said decentralized tools hinder income tracing and therefore strain assessment systems. Officials argued that additional clarity could improve cooperation across reporting channels.

Policymakers Weigh Limited Scope for Reform

Budget discussions remain ongoing as revenue needs influence the government’s stance. Authorities may prioritize stability since earlier tax changes already shaped fiscal planning. Analysts expect selective adjustments rather than broad structural revisions.

India’s crypto industry continues to press for moderate changes that support lawful activity and sustained oversight. The sector said modern markets require updated policies because participation keeps expanding. Industry groups stated that recalibrated rules would strengthen domestic competitiveness while preserving regulatory authority.

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