The situation regarding cryptocurrencies in India generates extensive discussions. The government has set high taxes and restrictions but has not outright banned digital assets, creating uncertainty in the sector.
Mixed Signals From India’s Crypto Policy
India's crypto industry is divided. Raj Kapoor, CEO of the India Blockchain Alliance, believes strict rules are better than ambiguity, while many crypto players are calling for reform. Local exchanges advocate for:
* Reducing TDS from 1% to 0.01% * Allowing losses to be offset against gains
However, with rising concerns about tax evasion and cybercrime, authorities are hesitant to adopt more liberal crypto policies just yet.
Indian Tax Authorities Are Watching Crypto Traders Closely
The Indian Income Tax Department has issued notices to thousands of individuals who traded digital assets but failed to report them in FY 2022–23 and 2023–24 tax filings. Authorities suspect some traders used crypto as a tool for tax evasion, exploiting the lack of detailed reporting standards during early regulation. Crypto traders must now amend their filings using the updated return option. CoinDCX Co-founder Sumit Gupta has advised all users to report crypto income, including earnings from airdrops or global exchanges, emphasizing the necessity of compliance.
Crypto Tax Rules: A Barrier to Growth?
India’s current crypto tax policy includes:
* 30% capital gains tax on digital assets * No loss offset allowed * 1% TDS on transactions exceeding Rs. 10,000
Due to these tough regulations, top global exchanges like OKX have exited the Indian market. Even homegrown platforms feel the pressure, urging policymakers to reconsider the TDS rate and revise the tax structure to promote growth and investment.
India isn't against crypto — but it's not fully embracing it either. With tax notices being sent, foreign platforms exiting, and cybercrime increasing, the focus remains on compliance and safety rather than rapid liberalization. Until India establishes a robust regulatory framework, a truly crypto-friendly economy might remain out of reach.
