Catenaa, Wednesday, January 28, 2026-India’s crypto executives are urging the government to ease the 1% transaction-level TDS and the 30% flat tax on virtual digital asset gains ahead of the 2026 Union Budget, citing concerns that the current regime is pushing trading activity offshore.
Industry leaders, including senior executives from WazirX and Delta Exchange, argue that the 2022 crypto tax framework improved traceability but has drained onshore liquidity and prompted users to migrate to foreign platforms, weakening domestic oversight and economic activity.
Estimates suggest Indian users generated nearly ₹5 lakh crore in trading volume on overseas exchanges between October 2024 and October 2025.
The 1% TDS is levied on every crypto transaction, while the 30% tax on gains does not allow for offsetting losses. Executives contend that relaxing these measures could retain more activity within India’s regulated ecosystem without compromising compliance.
Nischal Shetty, WazirX founder, described Budget 2026 as an opportunity to “fine-tune a framework that supports transparency and compliance while fostering innovation.”
Delta Exchange CEO Pankaj Balani emphasized risks from reliance on foreign platforms, including weaker consumer protection and job and tax revenue losses, calling for a “Make in India” approach to strengthen domestic exchanges.
Indian authorities have meanwhile heightened scrutiny of crypto platforms.
The Financial Intelligence Unit now requires live identity verification and enhanced client due diligence to curb illicit activity.
The Income Tax Department warned in parliament that crypto’s pseudonymous and fast-moving nature could complicate enforcement of tax laws.
Executives stress that reforms could help India retain its position in the global crypto market, which is evolving with increasing institutional participation and clearer regulatory frameworks abroad.
