Crypto market expects regulatory clarity and tax rationalisation from Budget 2026

As Budget 2026 approaches, the crypto or virtual digital asset sector is looking for long-awaited regulatory clarity to boost investor confidence, along with a rationalisation of the current 1% TDS on crypto transactions.

In the Union Budget 2025, the finance minister kept the existing tax rules on virtual digital assets (VDAs) unchanged despite repeated calls from the cryptocurrency industry for reforms noting that the current rules are a hurdle for investors and traders.

Budget 2022 marked the formal recognition of cryptocurrencies as Virtual Digital Assets with a defined tax regime.

Also Read | Binance lists 12 themes that will shape crypto market in 2026. Check details

Current taxation on cryptocurrency

The Income Tax Act contains key provisions—Sections 115BBH and 194S—that govern the taxation of Virtual Digital Assets (VDAs) such as cryptocurrencies, NFTs and tokens. VDA gains are taxed at a flat 30%, with a 1% TDS on transactions, while non-trading income may be taxed as per the individual’s income slab.

Here's what some of the leading voices in the industry had to say:

Raj Karkara, COO, ZebPay

The Union Budget 2026 comes at a pivotal moment for India’s crypto ecosystem, with the industry hopeful for long-awaited regulatory clarity that can bring greater direction and confidence to the investors and a clear and consistent framework for digital assets would help strengthen trust among investors, institutions, and market participants, while enabling business to operate responsibly within well-defined boundaries.

From a taxation standpoint, a rationalisation of the current 1% TDS on crypto transactions could meaningfully improve liquidity and encourage stronger onshore participation, while a review of the flat 30% tax on VDA gains, aligned with other asset classes and allowing for loss set-offs, would create a more balanced and predictable investment environment.

Greater policy clarity could unlock innovation, help India’s Web3 ecosystem scale responsibly, and strengthen the country’s role in the global crypto economy.

Nischal Shetty, Founder, WazirX

This budget is a clear opportunity to fine-tune a framework which supports transparency and compliance while fostering innovation.

Lower transaction-level TDS and allowing loss set-offs could revive onshore liquidity, improve compliance, and keep crypto activity within India’s regulated framework and clear rules on compliance and reporting would boost investor confidence and support a sustainable digital asset ecosystem, helping India move towards its $5 trillion economy goal, Shetty further added.

Pankaj Balani, CEO and Co-Founder at Delta Exchange

India’s leadership in global crypto adoption reflects strong grassroots participation from both retail users and sophisticated market participants, the upcoming Union Budget is an opportunity to match that momentum with a clear ‘Make in India’ approach to the digital assets industry.

The priority should be to back compliant domestic platforms that follow Indian KYC/AML norms, capital controls rules, protect consumers’ data, and contribute to India’s economic growth, rather than allowing offshore players to scale by operating outside our regulatory perimeter.

Also Read | Gold rally adds Rs 117 lakh crore to Indian household wealth in 2025

In this Budget, we hope to see a balanced regulatory framework that enables responsible innovation while firmly enforcing compliance. That means acting decisively against entities offering unauthorized services, and clearly differentiating between compliant Indian platforms and non-compliant offshore operators through policy support.

Sumit Gupta, Co Founder at CoinDCX

The virtual digital asset sector is naturally looking for measured relief, especially since it has been four years since the current taxation framework was introduced and the decisions taken now can meaningfully accelerate innovation and help India emerge as a global Web3 and VDA leader.

A critical first step is ensuring clarity in rules and mandating that all crypto exchanges uniformly implement TDS provisions, which will improve compliance and enhance citizen protection against questionable, non compliant operators through improved adherence to regulations.

SB Seker, Head of APAC, Binance

India’s rapid adoption of blockchain and virtual digital assets (VDA) reflects both the scale of its digital economy and growing participation by retail users. The forthcoming budget presents an opportunity to strengthen the VDA ecosystem through measured regulatory and tax refinements that protect users, maintain financial stability, and support responsible market development.