The Union Budget 2025–2026 left the web3 and cryptocurrencies companies of India unsatisfied due to their huge tax burdens along with the absence of clarity which still has it dealing with. Individual and business communities were provided some tax reforms and relief but left the crypto world disappointed, unmoved, without any relief at all.
No Relief on 1% TDS, Indian Exchanges at a Disadvantage
Crypto industry leaders had hoped for amendments to the 1% Tax Deducted at Source (TDS) under Section 194S, which currently applies to every crypto transaction on Indian exchanges. In the budget, no changes were made to that rule, which reduced liquidity further and encouraged trading offshore rather than within the domestic market. “Offshore exchanges are free of this tax benefit,” said Sumit Gupta, a co-founder of CoinDCX.
Union Budget 2025 Disappoints Crypto Industry, Offers Partial Relief for Web3
— WorldMagzine (@WorldMagzine) February 2, 2025
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Regulatory Parity Still Missing
The other major demand from the crypto sector has been regulatory parity between Indian and foreign exchanges. The tax structure makes it easier for Indian traders to transfer money to international platforms that are exempted from the local tax rules. Industry analysts argue that, to maintain a level playing field and promote compliance, the government must impose the same 1% TDS on the foreign exchanges that do business in India.
Higher Compliance Cost to Home-Based Crypto Platforms
Though the budget measures have promised making individual tax compliance easier, there are bound to be certain of these measures which might add potential difficulty for the local crypto exchange in getting to comply with regulation. That sort of reporting would make the current regulatory scenario tough for Indian Crypto Company ecosystem instead of welcoming it to scale further.
What’s Next for India’s Crypto Ecosystem?
In the absence of tax relief and sustained regulatory uncertainty, Indian crypto exchanges may be dealt another blow to retain users and maintain liquidity. Industry leaders say that India might lose its advantage in the blockchain and Web3 space unless it has friendly policies. Still, the crypto community is optimistic that the government will engage in further discussions and work toward a balanced regulatory framework in the near future.
