India's Cryptocurrency Tax Landscape: Challenges and Changes

India's Union Budget 2025 retains the existing tax framework for cryptocurrencies, maintaining a 30% tax on profits from virtual digital assets (VDAs) like Bitcoin and Ether, with a 1% Tax Deducted at Source (TDS) on transactions exceeding 10,000 rupees. A new reporting system mandates individuals and businesses to declare crypto profits in a designated section of the Income Tax Return (ITR) for FY 2025-26. Despite these measures, the TDS policy has driven many Indian users to foreign exchanges, resulting in significant revenue losses for the government. A report indicates that over 90% of trading volume has shifted offshore, with domestic platforms suffering declines in user engagement. The stringent tax regime has stifled innovation and led to the closure of local exchanges like WazirX's NFT marketplace. In contrast, countries like Singapore and Dubai have adopted more favorable tax policies, attracting investors. As discussions on regulatory reforms continue, there is cautious optimism that India may adjust its tax policies to enhance domestic trading and innovation. Read more AI-generated news on: https://app.chaingpt.org/news