India, 21st January 2025: Ahead of the upcoming Union Budget in February, CoinSwitch has released insights from a nationwide survey capturing investor sentiment on the taxation and regulation of crypto (Virtual Digital Assets – VDAs) in India.
The survey indicates a high level of awareness of India’s current crypto taxation framework. Nearly 90% of respondents reported familiarity with key provisions, including the 30% tax on gains, the absence of loss set-off or carry-forward, and the 1% TDS on transactions. Despite this awareness, a majority of respondents expressed concerns regarding the perceived fairness of the current framework. 66% believe the current crypto tax structure is unfair.
Commenting on this Mr Ashish Singhal, Co-founder of CoinSwitch, says, “The survey shows that investors are not seeking tax exemptions, but rationalisation. Respondents favour lower tax rates, loss set-off provisions, reduced TDS, and clearer regulations aligned with established financial markets. The findings indicate that investors are informed, willing to comply, and seeking a fair and predictable framework. As the Union Budget approaches, rationalising crypto taxation and providing regulatory clarity can support compliant onshore participation and contribute to a more transparent and well-regulated digital asset ecosystem.”
Taxation is also influencing market behaviour. A majority of respondents (59%) reported reduced participation in crypto investing or trading due to the prevailing tax regime. This trend suggests that the current tax structure appears to be influencing participation patterns, with potential implications for trading volumes, liquidity, and onshore market activity.
In contrast, 17% indicated increased participation, while 16% said taxation had no impact on their activity. At the same time, these segments of respondents reported stable or increased participation despite the tax regime. This suggests that some investors are adopting longer-term investment approaches, placing greater value on regulatory certainty than short-term tax considerations.
A majority of respondents favour integrating crypto into India’s mainstream financial taxation system. 61% believe crypto should be taxed similarly to equities or mutual funds. 17% prefer a separate tax framework. This reflects a preference for treatment aligned with established financial instruments.
When it comes to information sources, respondents primarily rely on crypto platforms and exchanges (30%), followed by news media (27%) and social media (25%) for updates on crypto and taxation. This highlights the role of platforms in investor education and the importance of consistent, authoritative regulatory communication.
Beyond taxation, the survey highlights the importance of broader regulatory clarity. Over 80% of respondents consider clear regulation to be important, with 60% rating it as extremely important, underscoring the view that tax reform alone is insufficient to build long-term investor confidence.
Overall, policy sentiment captured in the survey leans towards enablement, with 51% of respondents believing that crypto should be encouraged as a new asset class in India.
