Budget 2026: What India's Crypto Industry Expects; Lower TDS & Fairer VDA Tax Rules On The List

Over the past few years cryptocurrency trading has seen massive adoption in India especially among the youth. With this massive adoption comes regulatory challenges and clarity on these virtual Digital Assets. Crypto industry experts have some high hopes from the upcoming union budget 2026. The sector is pushing for TDS cuts, loss set-offs, and regulatory clarity on VDAs, with no changes yet announced.

According to data presented in Parliament and quoted by The Hindu, the total value of crypto transactions in the country crossed Rs. 51,000 crore in 2024-25, with a 41% rise compared to the previous year.

We can clearly see how large the crypto market has become in India. The data also shows that the government earned Rs. 511.8 crore through Tax Deducted at Source (TDS) on cryptocurrency transactions during the year.

Despite strict tax rules and regulatory uncertainty, interest in cryptocurrencies among Indian investors is very strong as Crypto trading is legal in India if done on exchanges registered with FIU. Traders need to pay 30% tax on profits, plus a small 4% extra charge, and 1% tax is cut on big trades over Rs. 10,000.

Crypto Industry Expectations In Budget 2026

"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." said Ashish Singhal, Co-founder, CoinSwitch

"A reduction in TDS on VDA transactions from 1% to 0.01% could improve liquidity, ease compliance, and enhance transparency while preserving transaction traceability. Raising the TDS threshold to Rs. 5 lakh would help protect small investors from disproportionate impact." Ashish further added.

People keep investing through long-term plans, mainly in Bitcoin, especially from smaller cities outside metros.
In a report released by CoinDCX, 40% of India's crypto users now come from Tier-2 and Tier-3 cities. Apart from that, female participation in crypto has also doubled year-on-year in 2025. This is a big shift and the crypto market is expected to grow in the coming years, matching global shifts like using crypto for real assets.

Budget 2026 Must Align Crypto Rules With Investor Maturity

"India's crypto investors have steadily moved from hype-driven moves to a more disciplined, long-term approach to virtual digital asset investing. As the 2026 Union Budget approaches, we have an opportunity to align regulations with the evolving maturity of Indian crypto investors. While the 2022 Union Budget gave the sector formal recognition, measures such as the 1% TDS on transactions pushed trading activity offshore, reducing transparency within the domestic ecosystem. The inability to set off losses against gains has also limited prudent portfolio management. Allowing loss offsetting could lower friction, encourage responsible participation, and support a transparent, compliant, and sustainable crypto ecosystem in India." said Edul Patel, CEO, Mudrex.

All About VDA Taxation

In India, income from Virtual Digital Assets (VDA), such as cryptocurrencies and Non-Fungible Tokens, is subject to a specific tax regime introduced by the Finance Act, 2022. As mentioned earlier, crypto trading includes a flat 30% tax on gains and a 1% Tax Deducted at Source (TDS) on transactions.

"Introduced in 2022 as a stand-in for regulation at that time, VDA taxation has since been complemented by strong oversight from FIU-IND and improved compliance. This Budget presents a great opportunity to revisit the framework in a manner beneficial to both investors and the government. We remain hopeful that the government will recognize this gap and consider reviewing the current framework soon." Ashish further said.

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