Crypto Community’s Expectations for India’s Budget 2025-26

As India’s Union Finance Minister Nirmala Sitharaman prepares to unveil the Union Budget 2025-26, the local crypto community is hopeful for changes that address their longstanding concerns. Over the past three years, the government has largely overlooked calls for lower tax rates and clearer regulations, maintaining a high 30% capital gains tax and a 1% tax deducted at source (TDS) on crypto transactions.

Although crypto is not banned in India, the steep taxes have led to frustration within the community, which feels the relationship with the government is one-sided. With the upcoming budget, there is renewed anticipation that the Finance Minister might announce measures related to the crypto sector.

Major Demands from the Crypto Community

Abolition of 30% Capital Gains Tax
A primary demand is to eliminate the 30% tax on capital gains from crypto. This tax was introduced on April 1, 2022, following a brief ban on crypto by the Reserve Bank of India. Influencers in the crypto space have criticized this high rate as detrimental to the sector.
Reduction of TDS Rate
The community is advocating for a reduction in the TDS rate from 1% to 0.01%. This change would make the market fairer by alleviating concerns about regulatory and tax arbitrage.
Regulatory Clarity
There is a strong push for the government to revisit the regulations governing Virtual Digital Assets (VDAs). The industry seeks clarity and consistency in tax treatment, suggesting that VDA income should align with standard capital asset guidelines.
Support for Innovation
Experts are proposing the establishment of Web3 startup special economic zones, offering an initial tax-free period for new businesses. This initiative aims to foster innovation and support entrepreneurs without financial burdens.
Investment in Technology Jobs
The community also calls for investments focused on technology jobs, particularly in digital asset security systems and controls, allowing Indian firms to lead in developing global solutions.
Adoption of Global Standards
The implementation of regulations that align with global standards is seen as crucial for enhancing the international standing of India’s crypto industry. Harmonized regulations would facilitate international money transfers and business collaborations.
Well-Designed Regulatory Framework
The community demands a comprehensive regulatory framework to address taxation issues and establish clear laws regarding income and transactions. Licensing protocols for exchanges should promote responsible market behavior rather than create obstacles.

Conclusion

As Budget 2025-26 approaches, Indian cryptocurrency enthusiasts view it as a pivotal moment for achieving regulatory and tax clarity. They aim for a framework that fosters innovation without unnecessary restrictions, encompassing TDS rate adjustments, clear regulations, and support for Web3 startups. The community hopes these changes will enable sustainable growth while aligning with international standards.