In a renewed push for crypto reforms, former Member of Parliament Ritesh Pandey has called on the Indian government to reconsider its current stance on digital asset taxation. He is urging a reduction of the 30% tax on crypto profits, removal of the 1% TDS on every trade, and the implementation of clear regulatory guidelines to support the country’s fast-growing digital economy.

Crypto as a Youth-Driven Asset Class

Pandey referred to cryptocurrency as a “yuva asset class”, highlighting its growing popularity among India’s young innovators and tech enthusiasts. He warned that the current tax structure and policy uncertainty are discouraging innovation and slowing down sector growth.

No Official Government Action Yet

Although Pandey’s remarks have generated significant buzz on social media, the government has yet to announce any formal changes to crypto tax regulations.

Earlier this year, the Union Budget 2025 introduced mandatory reporting of crypto transactions under Section 285BAA, aimed at improving tax compliance. However, the high tax burden continues to be a major roadblock for the ecosystem.

Strict Tax Policies Driving Crypto Activity Offshore

India currently has one of the toughest crypto tax regimes in the world. With retroactive taxation, no provision to offset losses, and a 1% TDS on every transaction, many Indian crypto users and startups have moved their operations to more supportive countries like Dubai and Singapore.

This trend is leading to a “brain drain”—the loss of talent and capital from India’s domestic crypto scene.

Crypto Adoption Booming Across India

Despite these setbacks, India is witnessing rapid crypto adoption, even beyond major metro cities. With over 100 million users (around 7% of adults), the country is projected to become a $15 billion market by 2035.

Smaller cities like Nagpur, Jaipur, and Lucknow have seen a massive surge in trading activity. In Q4 2024, these areas recorded $1.9 billion in trading volume, mostly from retail investors looking for alternative income sources.

Global Exchanges Return to Indian Market

Major global exchanges such as Coinbase and Binance have recently re-entered the Indian market after complying with anti-money laundering laws and participating in regulatory dialogue.

Indian Crypto Platforms Push for Policy Reforms

Leading Indian exchanges like CoinDCX and CoinSwitch are actively lobbying for regulatory change. They are calling for:

• A reduction in TDS from 1% to 0.01%
• Higher tax exemption limits
• Permission to offset or carry forward losses

These reforms aim to improve market liquidity, restore trader confidence, and revitalize domestic crypto activity.