Indian Crypto asset Sector Advocates for Tax Relief as Government’s Position Eases

The Indian cryptocurrency sector is intensifying its advocacy to lower the taxes imposed on crypto transactions. A report from the Financial Times released on 27 May 2025 indicates that the industry aims to take advantage of a more accommodating approach towards digital currency from the Indian government, coinciding with the nation’s trade discussions with the US.

Ashish Singhal, the founder of CoinSwitch, an Indian crypto asset trading protocol, noted that discussions with policymakers in India have increased in frequency. “We now meet monthly, sometimes even weekly,” he noted, a shift from the previous biannual meetings.

The primary demand from industry leaders remains a cut in what Singhal calls “excessively” stringent taxes.

The crypto asset sector, which has been marginalized for a long time due to fears about its connections to illegal activities, is now gaining traction as leaders from major Indian exchanges observe a significant change in government interactions, particularly following Donald Trump’s re-election and his supportive stance on crypto asset.

BREAKING: India contemplating adjustments to crypto policy

30% tax and TDS regulations may be updated to align with stock market standards

Huge if true! Indian #crypto traders could finally see some relief pic.twitter.com/8Qc67b8xd8

— Kiran Gadakh (crypto.kiran) (@kirangadakh16) February 2, 2025

At present, crypto transactions in India incur a 30% capital gains tax along with a 1% tax deducted at source (TDS). The government implemented these taxes in 2022 to enhance traceability and mitigate the illicit use of this asset class.

Nevertheless, a report by Esya Centre published in July 2024 reveals that these taxes have driven over 90% of Indian crypto traders to operate abroad.

Singhal suggested that establishing a lower transaction tax of 0.1% could maintain traceability without hindering the crypto market.

Explore: Best New Cryptocurrencies to Invest in 2025

Trump’s Pro-Crypto Policy Indirectly Influences India’s Position

Coinbase, which recently returned to India, believes that Trump’s presidency and pro-crypto policy is enhancing global crypto dynamics.

Tom Duff Gordon, the company’s VP of international policy, expressed that the Indian government recognizes that an outright ban on digital currency isn’t feasible.

He elaborated, “While reducing taxes isn’t our top priority, we think a balanced policy could expand the tax base and encourage the return of offshore trading.”

Companies like Coinbase and Binance, which have recently resumed operations in India, are targeting the Indian market, with projections suggesting growth from $2.5 billion in 2024 to beyond $15 billion by 2035, according to an analysis by the accounting firm Grant Thornton.

Grant Thornton partner Kush Wadhwa further noted that “India can’t turn a blind eye to crypto, but the government remains concerned about tax evasion and money laundering. It’s not about banning it; they simply want better regulation.”

Despite these perceived advancements, the crypto lobby in India is still dissatisfied. The Bharat Web3 Association criticized the absence of tax relief for digital assets during the February budget announcement, and Mudrex CEO Edu Patel described the tax framework as a deal breaker.

Explore: 9+ Best High-Risk, High-Reward Crypto to Buy in May 2025

Reserve Bank of India Maintains Caution

Traditionally, the Reserve Bank of India (RBI) has been the staunchest critic of the crypto asset sector, with a deputy governor equating crypto to Ponzi schemes in 2022. The RBI even prohibited banks from servicing crypto businesses, a decision that was later overturned by the Supreme Court.

In December of last year, the RBI warned that the crypto industry could pose a risk to the nation’s financial stability, but has since softened its position.

The new RBI governor, Sanjay Mishra, has avoided directly condemning the crypto asset industry, stating that the central bank is awaiting the government’s revised policy document.

Shifting public perception is still a challenge. Suril Desai, head of the technology team at Nishith Desai Associates, a law firm that contested the RBI’s ban attempt, remarked, “Many Indians still consider cryptocurrency to be illegal.”

Nonetheless, there is significant interest among younger Indians in investing in digital assets.

Explore: 10+ Crypto Tokens That Can Hit 1000x in 2025

The post Indian Crypto Industry Pushes for Tax Relief as Govt Stance Softens appeared first on 99Bitcoins.