India Budget 2026 Crypto Tax Debate Grows Over TDS and Regulation

India Budget 2026 Crypto Tax May Cut 1% TDS and Clarify VDA Rules

As India gets closer to Union Budget 2026, there is growing hope in the crypto industry that the government may finally bring clearer rules and fairer taxes for digital assets. According to Economic Times, the focus this time is expected to be on regulation and clarity, rather than introducing new or harsher taxes.

The discussion around India Budget 2026 Crypto Tax has picked up because many investors and exchanges believe the current system has slowed down digital assets activity in the country and pushed users to overseas platforms. 

Source: X (formerly Twitter) 

How Crypto Is Taxed in India Right Now? 

Crypto was officially recognised as a Virtual Digital Asset (VDA) in Budget 2022. Since then, the country has followed a strict taxation system for users.

At present: 

• Any profit is taxed at a flat 30%

• A 1% TDS is deducted on every trade

• Losses cannot be adjusted against profits

• Even small traders and big investors pay the same rate

In Budget 2025, the government kept these rules unchanged, despite repeated requests from the industry. 

Industry Wants Fairer Rules

Industry leaders have openly shared their concerns. CoinDCX CEO Sumit Gupta called Budget 2026 a chance for India to “reset” its approach.

He suggested three key changes:

1. Lower the TDS from 1% to 0.01% so trading activity can return to Indian exchanges

2. Replace the flat 30% rate with income slab-based taxation

3. Allow loss set-off, just like other asset classes

Supporters say these steps would make trading more transparent and encourage people to stay on Indian platforms instead of moving abroad.

What Exchange Data Tells ? 

Data provided by CoinDCX reveals the actual size of the crypto market in India. The exchange currently has over 21 million users and has already paid more than ₹13 crore in TDS to the government. It also holds reserves of more than $500 million and has an investor protection fund.

The country is also one of the leading countries in digital assets adoption. In 2025, the number of people contributing to digital currency SIPs increased by almost 60%. It is also believed that if the upcoming crypto tax treatment becomes more balanced, the grey market will decrease.

Government is Still Moving with Caution

The government is still moving with caution. In January 2026, the Income Tax Department and the Reserve Bank of India expressed their concerns in Parliament about the borderless nature of this asset class.

Taxation authorities have increased monitoring by using data from FIU-registered exchanges and sending notices to users where tax details don’t match. This shows that while reform is possible, strict oversight is likely to continue. 

Why Is Budget 2026 So Important? 

The decision on India Budget 2026 could shape the future of crypto in the country. Fair taxes, clear rules, and investor protection could help the nation move from strict control to structured growth in digital assets. For now, the community is waiting to see whether it brings meaningful change or keeps things exactly the same.

YMYL Disclaimer: This content is for information only and not financial advice. Markets and tax rules may change.