Prior to the Union Budget 2026, the demand for the crypto industry is clear. Exchanges and Web3 companies seek the 1 per cent TDS to be reduced to 0.01 per cent.
With the Union Budget 2026 around the corner, Indian cryptocurrency investors are eagerly waiting for any potential change in the realm of the digital asset industry in the country. As the sector has been facing heavy taxes and stringent regulations in recent years, it is now hopeful to witness some significant changes this time.
The crucial question the crypto industry wants answered is: will Budget 2026 bring relief to crypto investors from the 30 per cent tax, or will the government’s entire focus remain on promoting the digital rupee, i.e., the Central Bank Digital Currency (CBDC)?
It is to be noted that the Indian crypto market is subject to the world’s strictest tax rules on cryptocurrencies. To substantiate it, a flat 30 per cent tax has been levied on crypto gains since 2022. It gets stricter with a 1 per cent TDS (Tax Deducted at Source) on every transaction. The industry has been making the point that this 1 per cent TDS makes trading expensive while stifling liquidity.
Consequently, a large number of Indian investors have shifted to offshore and foreign exchanges, which has resulted in billions of dollars in trade volume moving out of the country.
Prior to the Union Budget 2026, the demand for the crypto industry is clear. Exchanges and Web3 companies seek the 1 per cent TDS to be reduced to 0.01 per cent. Along with this, the demand is to link the 30 per cent tax to income tax slabs, with the permission to offset crypto losses against profits.
Platforms like CoinDCX and ZebPay are of the view that this will have major implications, including a significant increase in compliance while also allowing Indian exchanges to become competitive again.
“The Union Budget 2026 comes at a pivotal moment for India’s crypto ecosystem, with the industry hopeful for long-awaited regulatory clarity that can bring greater direction and confidence to the investors. A clear and consistent framework for digital assets would help strengthen trust among investors, institutions, and market participants, while enabling business 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,” said Raj Karkara, COO, ZebPay.
However, both the government and the RBI continue to adopt a cautious stance, citing concerns over the volatility of private cryptocurrencies, risks of money laundering, and challenges in monitoring transactions conducted through offshore platforms.
