Cryptocurrency users in India are burdened with high taxes and a lack of clear legal guidance, hindering the growth of this young technology industry.
The application of a 30% tax on cryptocurrency profits along with a 1% TDS on transactions is slowing the development of the Web3 community and causing many to switch to foreign platforms.
MAIN CONTENT
India's cryptocurrency tax is currently high with a 30% profit tax and a 1% TDS on transactions.
Tax pressure pushes over 5 million users to move their trades abroad, resulting in a loss of about 4.2 billion USD in taxes.
The Coin Act 2025 bill proposes tax reforms and the establishment of regulatory frameworks to promote the development of the Web3 industry.
How is cryptocurrency tax applied in India?
Financial experts and industry leaders emphasize that India imposes a 30% tax on cryptocurrency profits and a 1% TDS on each sale transaction, regardless of whether the amount is small or large.
According to former MP Ritesh Pandey, this hinders innovation and stifles a highly potential industry led by India's youth.
The current tax policy is creating significant barriers to innovation and could very well stifle the strong growth potential of the Web3 technology industry in India.
Ritesh Pandey, former MP, July 2025
What is the impact of high taxes on cryptocurrency trading in India?
CEO Sumit Gupta of CoinDCX announced data showing that over 5 million users have switched to foreign exchanges, with trading volumes reaching up to 42 billion USD from July 2022 to July 2023, resulting in an estimated loss of 4.2 billion USD in tax revenue.
Additionally, Bybit applies an 18% GST on cryptocurrency-related services starting July 7, 2025, further increasing costs for users in India.
The implementation of a 1% TDS tax not only fails to improve budget revenue but also drives users to foreign platforms, causing India to lose billions of USD in economic benefits.
Sumit Gupta, CEO of CoinDCX, 2025
Why does the lack of regulation and oversight put India at security risk?
India currently lacks clear regulations for the cryptocurrency market, causing exchanges to operate non-compliantly with anti-money laundering laws. Moreover, serious security incidents at domestic exchanges like CoinDCX and WazirX have raised concerns about the safety of user assets.
The government lacks a real-time cryptocurrency income tracking system, leading to difficulties in verifying and accurately collecting taxes. Although tax officials are being trained in blockchain and digital technologies, it is still insufficient to keep up with the rapid development pace of the industry.
What changes does the Coin Act 2025 propose for the Indian cryptocurrency market?
Hashed Emergent introduces the Coin Act 2025 to establish a robust framework of rights for cryptocurrency users, including the right to self-manage assets, tax policy reform, and the establishment of a specialized regulatory authority.
This is an ambitious action plan, and although it has not yet become law, it is expected to lead India to be a pioneer in the Web3 field.
Frequently Asked Questions
What is the current cryptocurrency tax rate in India?
In India, profits from cryptocurrency are taxed at 30%, while a 1% TDS is applied on each sale transaction.
What difficulties do cryptocurrency users in India face?
Users face high taxes, complex regulations, and a lack of legal frameworks, forcing many to trade on foreign platforms, leaking domestic tax revenue.
What does the Coin Act 2025 mean for the Indian crypto market?
The bill proposes self-responsibility for users, tax reforms, and the establishment of a regulatory authority to create a sustainable legal basis for Web3 development.
How is user monitoring and protection for crypto in India?
Cryptocurrency security is still weak, with many attacks on exchanges and a lack of real-time monitoring systems posing a significant risk to users' assets.
How will the new tax event from Bybit affect from July 2025?
From July 7, 2025, Bybit will start applying an 18% GST tax on most cryptocurrency services, increasing transaction costs for Indian users.
Source: https://tintucbitcoin.com/cuu-dai-bieu-keu-goi-minh-bach-thue/
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