India Eyes Crypto Tax Slash: Relief on the Horizon for Traders and Exchanges

India’s government is reportedly preparing to slash its stringent crypto tax regime, responding to mounting pressure from domestic exchanges and industry leaders. Since 2022, crypto investors have faced a flat 30% tax on profits and a 1% Tax Deducted at Source (TDS) on every transaction—measures that have driven over 90% of Indian crypto trading to offshore platforms and stifled local market growth.

 

The proposed reforms could see the TDS rate drop dramatically from 1% to just 0.1%, a move that exchanges argue would keep trading activity within India while still allowing authorities to effectively track transactions. Industry leaders contend that the current tax structure is “very harsh,” with high rates not only deterring investors but also resulting in significant capital flight to more crypto-friendly jurisdictions like Dubai and Singapore.

 

While the 30% capital gains tax remains in place for now, policymakers are reportedly warming up to broader changes, spurred by renewed dialogue with crypto companies and shifting global sentiment. The government’s softer stance is already encouraging major global exchanges to re-enter the Indian market, signaling a potential revival of the country’s digital asset ecosystem.

 

A final decision is expected soon, and if implemented, the tax cut could revitalize India’s $15 billion crypto sector, providing much-needed relief to traders and exchanges alike.

 

Source: Taxscan, CCN, CoinDesk