India’s crypto exchanges are urging tax changes ahead of the Union Budget, due Feb. 1, arguing current rules push activity offshore as enforcement tightens in India and globally (the Budget is expected on that date). Industry leaders say a recalibrated tax framework could keep liquidity and jobs onshore.
The 2022 rules impose a flat 30% tax on crypto gains and a 1% tax deducted at source on most transactions. Losses from trades cannot be set off against gains.
Executives at compliant platforms warn the transaction-level levies and loss restrictions deter domestic participation. Nischal Shetty of WazirX said, “As India prepares for Budget 2026, there is a clear opportunity to fine-tune a framework which supports transparency and compliance while fostering innovation,” and urged a review.
Raj Karkara of ZebPay called the budget a pivotal moment and said, “A rationalisation of the current 1% TDS on crypto transactions could meaningfully improve liquidity and encourage stronger onshore participation,” while urging review of the 30% gain tax. SB Seker of Binance asked for a focus on realized capital gains and removal of transaction-level levies, warning against a “tax-and-deter” approach.
Regulators are tightening rules as well; India’s Financial Intelligence Unit now requires live selfie checks, geolocation and IP tracking, bank account verification, and extra ID for users. Tax officials warned on Jan. 8 that offshore exchanges, private wallets and DeFi complicate tracking taxable crypto income, and a related video accompanies coverage.
