Recent research suggests that most crypto users in India are dissatisfied with the current tax regime. A survey by CoinSwitch, India’s leading cryptocurrency exchange, revealed that 66% of India’s crypto investors consider the current tax regime unfair.
“Unfair” Taxing is Affecting Crypto Participation in India
Further details reveal a significant reduction in the number of people participating in crypto investing, with 59% of the investors confirming that they have reduced their crypto engagements because of the current tax structure. Meanwhile, approximately 61% of India’s crypto users prefer a tax protocol similar to equities and mutual funds have, with 17% preferring a separate tax framework.
In the meantime, 80% of crypto users in India are calling for changes in the upcoming Union Budget 2026, which India’s Finance Minister, Nirmala Sitharaman, will present on Sunday, February 1. Notably, tax relief features among the key expectations from the Indian public, most of whom decry the current fiscal conditions. Many Indians also expect the upcoming budget to reflect policy reforms that will unlock fresh economic growth.
India Has One of the Highest Crypto Tax Rates
For context, India is one of the nations with the highest tax rates, with a 30% flat charge on profits earned from selling, trading, or exchanging virtual assets of any form, including cryptocurrencies and NFTs. There are also other conditions that most users consider too stringent for promoting innovation within the industry, such as not allowing users to deduct losses from crypto transactions to reduce taxable gains.
Besides the flat tax on profits, the Indian government also imposed a 1% TDS tax on crypto users, which is deducted by the buyer or exchange during crypto transactions. Additionally, the 30% flat tax also applies to income generated from other forms of crypto activities, including staking, mining, or airdrops.
Most Indian crypto users consider the current tax regime exaggerated and expect the government to review the existing protocol in the upcoming Union Budget.
Related: Bharat Web3 Association Urges India to Reform Crypto Taxes Ahead of 2026 Budget
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