Whalesbook
Crypto Industry Appeals for Budget Reforms
India's burgeoning cryptocurrency sector is making a strong case for significant changes in the upcoming Union Budget 2026. The primary focus is on achieving regulatory clarity for digital assets and securing tax concessions, particularly a reduction in the 1% Tax Deducted at Source (TDS) on crypto transactions.
Industry stakeholders argue that the current tax framework, largely unchanged since its introduction in Budget 2022, discourages both domestic and international investors. The 30% flat tax on Virtual Digital Asset (VDA) gains, alongside the TDS, creates an unfavorable investment environment compared to other asset classes. Leaders emphasize that clarity would bolster trust and enable responsible business operations.
Taxation and Liquidity Concerns
Raj Karkara, Chief Operating Officer at ZebPay, highlighted the Union Budget 2026 as a critical juncture for India's crypto ecosystem. He stressed that a clear, consistent framework for digital assets is essential for investor confidence and market stability. Karkara specifically called for the rationalization of the 1% TDS to improve market liquidity and encourage more participation on Indian platforms.
He also advocated for a review of the 30% VDA gains tax. Aligning this with other investment vehicles and permitting loss set-offs would create a more balanced and attractive investment landscape, potentially unlocking innovation and strengthening India's position in the global Web3 economy.
Calls for Compliance and Innovation
Nischal Shetty, founder of WazirX, views the upcoming budget as an opportunity to refine the existing tax structure. He believes that lowering transaction-level TDS and enabling loss set-offs could revive onshore liquidity and enhance compliance. Clear reporting rules, he noted, would further boost investor confidence and support India's ambition for a $5 trillion economy.
Sumit Gupta, co-founder of CoinDCX, echoed the sentiment, stating that four years since the current framework's introduction, measured relief is keenly awaited. He emphasized the need for uniform TDS implementation across all exchanges to improve compliance and consumer protection by weeding out non-compliant operators.
Pankaj Balani, CEO and co-founder of Delta Exchange, called for a 'Make in India' approach to the digital assets industry, matching India's high global crypto adoption rates with supportive domestic policies. He stressed differentiating between compliant Indian platforms and unauthorized offshore entities, advocating for decisive action against the latter.