As Union Budget 2026 approaches, India’s crypto and blockchain debate is no longer about whether innovation should be allowed, but whether policy can keep domestic capital, liquidity, and enterprise adoption onshore.2025 marked the year crypto went mainstream globally—stablecoins processed $46 trillion in annual transactions, blockchain throughput increased 100-fold, and over $175 billion flowed into Bitcoin and Ethereum exchange-traded products. However, India’s virtual digital asset (VDA) ecosystem has remained constrained by what industry leaders describe as a “tax-and-deter regime” that pushes activity offshore rather than enabling domestic growth.With India now home to over 100 million crypto users—the fastest-growing user base globally—industry stakeholders are calling for fundamental reforms to taxation, regulatory architecture, and compliance frameworks, arguing that these would position the country as a leader in the compliant crypto finance space.The tax frictionThe crux of industry frustration centres on India’s 2022 VDA tax framework: a 30% tax on gains with no provision for loss offset, coupled with 1% tax deducted at source (TDS) on every transaction.”India’s VDA ecosystem is at a pivotal stage, with growing adoption across the country. However, the current tax framework presents challenges for retail participants by taxing transactions without recognising losses, creating friction rather than fairness,” says Ashish Singhal,… Read MoreYourStory RSS Feed
