Advertise
- Nidhi Kolhapur
Nidhi Kolhapur
Nidhi is a Certified Digital Marketing Executive and Passionate crypto Journalist covering the world of alternative currencies. She shares the latest and trending news on Cryptocurrency and Blockchain.
- Reviewed by:
Qadir AKQadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Jul 22, 2025 12:17 UTC
-
India’s Crypto Tax Trouble Leads to Calls for Cuts and Clear Rules
Former MP urges the government to cut crypto taxes and bring in clear, fair regulations to support Web3.
Heavy taxes and unclear rules have pushed over $42 billion in trading offshore, hurting local innovation.
The COINS Act 2025 proposes bold changes like self-custody rights, tax reform, and a dedicated crypto regulator to help India lead in Web3.
India’s crypto users continue to struggle with the high taxes and a lack of clear regulations. Former MP Ritesh Panday has once again stood up for India’s crypto community and is urging the government to cut 30% tax, remove the 1% TDS, and bring in clear regulations.
Over-Regulation Could Kill India’s Web3 Potential
He explained how buying an NFT involves three steps: buying crypto, transferring it to a wallet, and making the purchase. With the current rules, 1% TDS is charged at every stage. He warned that this kind of policy creates red tape, stifles innovation, and could kill a growing, youth-driven industry.
India has the potential to lead in Web 3.0 with its many startups and unicorns. But such heavy-handed regulation is choking innovation before it has a chance to grow.
India’s Crypto Tax Burden Keeps Growing
India doesn’t yet have a law to regulate crypto, but strict taxes are already in place. Indian crypto users face a steep tax burden. There is a 30% tax on any profits they make from crypto trades. Then, a 1% TDS is taken on every sell transaction, no matter the amount.
Starting July 7, 2025, things got even tougher. Bybit will start charging 18% GST on almost all crypto services, like trading, staking, withdrawals, deposits, token swaps, and more.
Heavy Taxes Driving $42B in Volume Offshore
Sumit Gupta, the CEO of CoinDCX, has pointed out that the 1% TDS rule is doing more harm than good. He revealed that it has driven over 5 million Indian users to offshore platforms, shifting $42 billion in trading volume abroad between July 2022 and July 2023. As a result, the government lost an estimated $4.2 billion in revenue, while collecting only $31 million via TDS.
Many Indians are using foreign crypto platforms to trade. Indians traded Rs 2.63 lakh crore on them in just 10 months, skipping around Rs 2,600 crore in taxes. If this continues, losses could cross Rs 17,000 crore soon.
Lack of Regulation, Weak Tracking, and Rising Security Concerns
Crypto is still unregulated in India. Platforms should register under anti-money laundering laws, but many fail to comply. Besides, major security breaches at exchanges like CoinDCX and WazirX have raised serious concerns about the safety of user assets.
India does not have a real-time system to track if people are honestly reporting their crypto income. Since crypto tax rules kicked in (FY 2022–23), the Government has collected over Rs 700 crore, but they haven’t estimated how much money might be lost due to under-reporting.
Tax officers are getting trained in blockchain, digital forensics, and related areas. Experts doubt if this training is enough to keep up with the fast-moving crypto world.
COINS Act 2025: A Bold Blueprint
But efforts are underway. Hashed Emergent recently introduced the COINS Act 2025, a bold, rights-based crypto proposal. It calls for self-custody rights, tax reforms, and a dedicated regulator. Although it’s not a law yet, it’s a powerful blueprint to make India a true Web3 leader.
Never Miss a Beat in the Crypto World!
Stay ahead with breaking news, expert analysis, and real-time updates on the latest trends in Bitcoin, altcoins, DeFi, NFTs, and more.
FAQs
India imposes a flat 30% tax on crypto gains and a 1% TDS on transfers over ₹10,000, with no loss set-off.
The 1% TDS applies at every step, causing red tape, killing innovation, and pushing users to offshore platforms.
The COINS Act 2025 is a crypto reform proposal focusing on tax relief, self-custody rights, and better regulations.
India collected over Rs 700 crore in crypto taxes since FY 2022–23 but faces huge under-reporting risks.
Yes 
No 
