India’s Union Finance Minister Nirmala Sitharaman has been disappointing the local crypto community for the past three years, ignoring the demands of lowering tax rates and clearer regulations for the sector. For years, crypto believers have been advocating for scrapping the 30% taxation on capital gains on crypto plus an additional 1% tax deducted at source (TDS) in India.
Crypto is neither banned nor regulated in India however the government collects steep taxes on the sector, much to the dismay of the community, who believes it is a one sided relationship. Ahead of the union budget 2025-26 which will be delivered by FM Sitharaman on Saturday, the buzz is strong that she might make announcements related to crypto sector.
In this article, we will try to understand the major aspirations and expectations of the crypto community from the Indian government ahead of union budget 2025-26.
What are the major demands of crypto community?
The crypto market demands definite regulatory structures and beneficial tax protocols which would help development through innovation while making India a pioneering force in digital assets. The Indian crypto community’s aspirations have increased in light of Donald Trump’s recent victory in the U.S. presidential election and his approach to addressing and promoting adoption in his nation.
Scrapping of 30% Capital Gains Tax on Crypto
One of the major demands of the Indian crypto community is scrapping of exorbitant 30% tax against any capital gains on crypto. After a brief ban on crypto by the Reserve Bank of India, the ban was ultimately lifted and India had imposed a 30% tax from April 1, 2022. Several leading crypto influencers have questioned the high tax rate against capital earnings calling it anti-crypto.
Reduction of Tax Deduction at source ( TDS )
The crypto community strongly desires an amendment of the present TDS rate from 1% down to 0.01%. The proposed adjustment will help make cryptocurrency more equitable across the market space by removing concerns about regulatory and tax arbitrage behavior for every stakeholder.
Regulatory Clarity
The cryptocurrency industry demands that the government revisits and improves regulations of Virtual Digital Assets (VDAs). Achieving clarity and tax stability remains the main priority for the category and tax treatment of these assets. The industry suggests that the government should handle VDA income in line with standard capital asset guidelines.
Support for Innovation
Within crypto circles experts suggest establishing Web3 startup special economic zones with an initial tax-free period for companies at their commencement. This proposal tackles two objectives: it promotes innovation together with product development operations which support entrepreneurs without disrupting their financial operations.
The community demands investment allocations specifically for technology jobs which must concentrate on digital asset security systems and controls. These stated commitments will authorize Indian companies to take major roles in developing global solutions.
Adoption of Crypto Regulations
The adoption of regulations that follow global standards would strengthen the international acceptance of India’s crypto industry. Harmonized regulations would create conditions to support international money transfer operations together with business teamwork.
The crypto community calls for a well-designed regulatory framework which should resolve cryptocurrency taxation issues and establish specific laws about income and transactions. Exchange licensing protocols should serve as instruments to maintain responsible behavior in the market since their main purpose is not to create obstacles.
Conclusion
Indian cryptocurrency enthusiasts continue to anticipate Budget 2025-26 as their opportunity to achieve both regulatory and tax clarity so that innovation can thrive without restrictions. From TDS rate changes to clear regulations and web3 startup backing the industry aims at obtaining an integrated framework that advances enduring expansion while following international benchmarks.
Also Read: Will Nirmala ignore Crypto again in Union Budget 2025-26?
