India Budget LIVE: Will the Government Rethink Crypto’s 30% Tax Today?

New data shows a growing gap between crypto trading outcomes and tax liability. While high-activity traders contribute most of the TDS, thin profit margins mean both active and retail investors are facing liquidity pressure.

In FY 2024–25, investor results were almost evenly split, with 50.91% reporting net gains and 49.09% ending the year with net losses. Despite this, taxable capital gains rose to ₹3,722 crore, even though actual net profits were lower. Investors who collectively recorded ₹1,178 crore in net losses still paid tax on ₹180 crore of gains, as current rules do not allow losses to be set off.

The government has announced a change in how share buybacks will be taxed. Union Finance Minister Nirmala Sitharaman said that buybacks will now be treated as capital gains for all shareholders.

The move is meant to stop the misuse of tax benefits through buybacks. Promoters, in particular, will have to pay more tax on buyback income. Corporate promoters will be taxed at 22%, while non-corporate promoters will face a 30% tax.

The new rule aims to make buyback taxation more uniform and reduce tax loopholes.

India’s crypto ecosystem saw ₹511.83 crore collected as TDS in FY 2024–25, but new data highlights a growing mismatch between tax deducted and actual tax owed. KoinX users alone contributed ₹130.16 crore, or 25.43% of total collections, even though their final tax liability stood at only ₹91.64 crore. This resulted in an estimated ₹38.52 crore locked in excess TDS and potential refunds.

The imbalance appears widespread. Over 30% of TDS deductions exceeded traders’ final tax dues, while nearly half of all TDS-paying users ended the year with net capital losses. At the same time, trading activity remains highly concentrated, with less than 5% of traders accounting for 87% of total TDS collections.

As the Union Budget 2026 approaches, India’s crypto industry is calling for a more outcome-based tax framework, including rationalisation of the 30% capital gains tax, permission to offset losses, and a review of the 1% tax deducted at source (TDS) on crypto transactions. These demands are supported by India’s Crypto Tax Story 2025, a new report by KoinX, which analyses anonymised data from nearly 7 lakh Indian crypto users in FY 2024–25 and shows how current tax rules often diverge from actual investor outcomes.

Manhar Garegrat, Country Head–India at Liminal Custody, said India’s crypto policy needs to move toward market structure and sustainability, warning that current tax frictions are pushing compliant trading activity offshore. He urged Budget 2026 to rethink transaction-level taxes and consider a VDA transaction tax model to keep crypto activity onshore, transparent, and economically viable.

Crypto and Bitcoin taxes are in focus today, with expectations of rationalisation and clearer rules rather than any expansion of the 30% levy, even as the government has not yet signaled formal changes.