Finance Minister Nirmala Sitharaman presented the Union Budget 2025-26, but crypto investors once again found no relief or policy changes related to virtual digital assets (VDAs). Despite growing expectations for a revision in the 30% tax rate on crypto gains and 1% TDS on transactions, the government did not introduce any modifications in the taxation or regulatory framework for cryptocurrencies. Meanwhile, income tax slabs were revised for individual taxpayers, but crypto investors were left empty-handed.
No Reduction in 30% Tax or 1% TDS on Crypto Transactions
Crypto traders and investors had been hoping for a relaxation in the 30% flat tax on gains from digital assets, a policy introduced in Budget 2022. However, the government chose to keep the tax structure unchanged, meaning that all gains from cryptocurrency trading remain subject to the high 30% tax rate without any deductions or exemptions.
Additionally, the 1% TDS (Tax Deducted at Source) on crypto transactions remains unchanged, despite continuous appeals from industry experts and crypto exchanges to lower it to 0.1% or remove it altogether. Many believe that the high TDS rate discourages trading and reduces liquidity in the market, forcing Indian investors to shift to offshore exchanges.
Revised Income Tax Slabs Offer Relief to General Taxpayers
While crypto investors received no relief, individual taxpayers under the new tax regime saw significant changes. The government revised the income tax slabs, increasing the tax-free limit to ₹12 lakh and reducing tax rates for middle-income earners. The new tax structure is as follows:
| Income Range (₹) | Tax Rate (%) |
|---|---|
| 0 – 4 lakh | Nil |
| 4 – 8 lakh | 5% |
| 8 – 12 lakh | 10% |
| 12 – 16 lakh | 15% |
| 16 – 20 lakh | 20% |
| 20 – 24 lakh | 25% |
| Above 24 lakh | 30% |
The revised tax regime aims to reduce the financial burden on middle-class taxpayers, increasing disposable income and encouraging spending. However, crypto gains remain separately taxed at 30%, offering no benefit from the new tax slab adjustments.
Crypto Industry’s Demand for Clarity Ignored
For the past three years, the Indian crypto industry has been urging the government to provide regulatory clarity on virtual digital assets. The industry had requested clear guidelines on issues such as tax treatment, compliance rules, and the classification of cryptocurrencies, but the Budget speech did not address any of these concerns.
Crypto exchanges and investors expected at least a formal policy stance on how the government intends to regulate the sector, especially with global markets embracing clearer frameworks. However, no regulatory roadmap was announced, leaving investors and companies in a state of uncertainty.
Global Adoption vs. India’s Passive Approach
Countries such as the U.S., U.K., Japan, and Singapore have introduced comprehensive crypto regulations to support innovation while maintaining oversight. Meanwhile, India continues to take a passive stance, keeping its existing tax framework without providing a legal status to crypto assets.
Major global financial institutions, including BlackRock, Fidelity, and Standard Chartered, have entered the crypto space, with the U.S. even approving Bitcoin spot ETFs in early 2024. Yet, Indian investors remain uncertain about whether the government intends to regulate or restrict digital asset trading in the future.
No Discussion on Blockchain or CBDC Expansion
Apart from ignoring cryptocurrency taxation and regulation, the Budget also failed to highlight any new initiatives related to blockchain technology or the expansion of India’s Central Bank Digital Currency (CBDC).
The Reserve Bank of India (RBI) has been conducting pilot programs for the digital rupee (e₹), but the Finance Minister did not announce any updates on its adoption, implementation, or integration with the existing financial system.
Industry Reactions: Disappointment Across the Board
The lack of action on crypto taxation and regulations has triggered strong reactions from investors, traders, and industry leaders.
- Crypto exchanges expressed frustration over the government’s failure to acknowledge digital assets as a growing industry. Many believe that India’s rigid stance is pushing talent and investments abroad.
- Investors were disappointed that despite multiple representations from the crypto community, the government did not reconsider the high tax structure.
- Blockchain entrepreneurs believe that without clear policies, India risks falling behind in Web3 innovation and decentralized finance (DeFi) development.
Concerns Over Brain Drain and Capital Flight
With no relief for investors and businesses, the crypto industry fears that more Indian startups and traders will move their operations overseas.
Countries such as Dubai, Singapore, and the U.K. have positioned themselves as crypto-friendly hubs with clear tax structures and supportive policies. Many Indian blockchain startups have already migrated abroad to escape uncertainty and heavy taxation.
Crypto analysts warn that if India continues its current approach, it may lose out on billions in potential investments and miss the opportunity to become a leader in blockchain and Web3 innovations.
What’s Next for Indian Crypto Investors?
With no changes in the 30% tax rate, 1% TDS, or regulatory clarity, Indian crypto investors remain in limbo. Many now look to the upcoming Finance Bill for any possible modifications in the taxation framework, though expectations remain low.
Some investors might continue trading through offshore platforms to avoid the high tax burden, while others may reduce their exposure to crypto assets due to regulatory uncertainty.
For now, the message from Union Budget 2025-26 is clear: India’s stance on crypto remains unchanged, offering no relief or clarity for investors and industry stakeholders.
