India’s crypto users are facing numerous challenges due to high taxes and a lack of clear regulations. Former MP Ritesh Panday has once again come forward to advocate for the Indian crypto community, urging the government to take action. He is calling for a 30% reduction in crypto taxes, the removal of the 1% TDS, and the implementation of clear and fair regulations.
Over-Regulation Could Stifle Innovation
Panday highlighted the cumbersome process involved in buying an NFT, which includes buying crypto, transferring it to a wallet, and making the purchase. The current rules impose a 1% TDS at each stage, creating unnecessary red tape, hindering innovation, and potentially stifling the growth of a youth-driven industry.
India’s Potential in Web 3.0 at Risk
Despite the potential for India to lead in Web 3.0 with its vibrant startup ecosystem, heavy-handed regulation poses a significant threat to innovation and growth in the crypto sector.
India’s Crypto Tax Burden Continues to Grow
While India lacks comprehensive regulations for crypto, stringent taxes are already in place. Crypto traders in India are subjected to a 30% tax on profits and a 1% TDS on every sell transaction. Additionally, starting July 7, 2025, Bybit will impose an 18% GST on various crypto services, further increasing the tax burden on users.
Heavy Taxes Drive Trading Volume Overseas
The 1% TDS rule has driven millions of Indian users to offshore platforms, resulting in a significant shift of trading volume abroad. This exodus has cost the Indian government billions in potential revenue while only collecting a fraction through TDS.
Regulatory Gaps and Security Concerns
The lack of regulatory oversight in India has led to non-compliance among crypto platforms, raising concerns about the security of user assets. Additionally, the absence of a real-time tracking system for crypto income poses challenges for tax collection and enforcement.
COINS Act 2025: A Path Forward
Hashed Emergent has introduced the COINS Act 2025, a progressive crypto proposal that advocates for self-custody rights, tax reforms, and the establishment of a dedicated regulatory body. While not yet a law, the COINS Act 2025 serves as a comprehensive blueprint to position India as a leader in the Web3 space.
In conclusion, India’s crypto community continues to face hurdles due to high taxes and regulatory uncertainties. With advocacy from leaders like Ritesh Panday and initiatives like the COINS Act 2025, there is hope for a more conducive environment for crypto innovation and growth in India.