Bharat Web3 Association Budget Demands: Will India Fix Crypto Taxes?

Breaking Down the Bharat Web3 Association Budget Demands for 2026

The Bharat Web3 Association (BWA) met with the Finance Ministry this week to share their plan for saving India’s crypto industry ahead of the 2026 Budget, they officially presented its roadmap to the Ministry of Finance. These Web3 Association budget demands for 2026 aren't just a wishlist; they are being framed as a "survival guide" for a sector that has seen nearly $42 billion in trading volume flee to offshore exchanges since the heavy 2022 tax laws took effect.

Source: X(formerly Twitter)

As of today, January 7, 2026, the Indian Web3 ecosystem remains at a crossroads. While the global market cap sits at a healthy $3.30 trillion, domestic players are struggling under a rigid 30% tax and a 1% TDS that many claim is "suffocating" market liquidity.

The "Survival" Wishlist: What BWA is Chasing

The Bharat Web3 Association budget demands center on three critical pillars that founders believe will determine if India remains a Web3 superpower or becomes a mere talent exporter to hubs like Dubai and Singapore.

The TDS Rollback: BWA is pushing to slash the 1% Tax Deducted at Source (TDS) to a mere 0.01%. The industry argues that the current 1% rate is not just a tax; it’s a capital lock-up that prevents high-frequency trading and professional market making.

Offsetting Losses: Unlike stocks or real estate, crypto investors in India currently cannot offset losses in one coin against gains in another. The Web3 Association budget demands seek to bring Virtual Digital Assets (VDAs) in line with traditional securities, allowing for "fair" profit-loss calculations.

Formal Banking Access: Despite the 2020 Supreme Court ruling, many BWA startups still face "shadow bans" from major commercial banks. The BWA has called for clear circulars from the RBI to ensure legitimate, FIU-registered businesses aren't cut off from the financial grid.

The Economic Stake: $1 Trillion at Risk

BWA Chairperson Dilip Chenoy has been vocal about the "brain drain" threat. India currently houses over 1,200 BWA startups and 17% of the world's blockchain developers. However, without "fair and predictable taxation", the capital meant for these startups is moving to more progressive jurisdictions.

The government has already seen the potential, collecting over ₹437 Cr in crypto taxes during the last financial year. However, the BWA argues that a lower tax rate would actually increase total revenue by bringing the millions of users who migrated to offshore platforms back to regulated Indian exchanges like CoinDCX.

Conclusion

The Bharat Web3 Association budget demands represent a desperate but logical plea for common sense. For over three years, the "30% tax + 1% TDS" combo has acted as a wall that only hurts compliant Indian businesses while doing nothing to stop offshore trading. If the 2026 Budget doesn't at least lower the TDS, we might see the final "hollowing out" of the domestic exchange industry. The government has the data; now they just need the political will to treat code as a commodity, not a vice.