The Union Budget 2025-26 has left India’s cryptocurrency and Web3 industry disappointed as it failed to address their long-standing demands related to taxation clarity and regulatory parity. While the budget introduced measures to simplify the tax regime for individuals and businesses, crypto industry leaders believe it did not go far enough to resolve critical issues affecting digital asset exchanges.
Sumit Gupta, co-founder of CoinDCX, expressed disappointment over the lack of tax relief for the sector. "Unfortunately, there is no relief to the crypto industry in Budget 2025. We were hoping for amendments to create parity between tax-compliant Virtual Asset Service Providers (VASPs) and non-compliant offshore exchanges," he said. He pointed out that despite repeated requests, the government has not addressed concerns regarding TDS (Tax Deducted at Source) under Section 194S, which currently places a 1% TDS burden on Indian exchanges but does not enforce the same rule on international platforms. "International exchanges should be obligated to the same 1% TDS as compliant Indian exchanges. As a compliant company, we are disappointed," Gupta added. Additionally, he warned that some provisions aimed at improving individual tax compliance for crypto investors could increase the compliance burden on already regulated domestic exchanges.
Shivam Thakral, CEO of BuyUcoin, said the budget left the Web3 sector with mixed feelings. While there were no specific announcements for the industry, he welcomed the government’s move to simplify TDS rules. "Reducing the number of rates and thresholds for TDS can enhance clarity and compliance for businesses operating within the Web3 ecosystem," Thakral noted. He also highlighted the government’s commitment to improving ease of doing business through regulatory reforms. The budget introduced a ‘Fund of Funds for Startups’ and extended the incorporation period for startups to five years, which he believes could benefit Web3 startups. However, he urged policymakers to provide clear taxation and regulatory guidelines to foster the industry’s growth. "We need decisive action to reduce uncertainties and encourage both domestic and international investments," he said.
Ashish Singhal, co-founder of CoinSwitch and Lemonn, appreciated the broader tax relief measures announced in the budget, particularly for the middle class. "Zero income tax for earnings up to ₹12 lakh is a major relief and could improve disposable income, stimulating consumer demand," he said. Singhal also welcomed the rationalisation of TDS and TCS, which aims to reduce compliance burdens for individuals and businesses. However, he did not comment on whether these changes would impact crypto exchanges directly.
The crypto industry had been hoping for taxation reforms, particularly a reduction in TDS on crypto transactions and clarity on how digital assets are classified. However, the government did not address these concerns, leaving uncertainty around how the sector will evolve. With international exchanges operating without the same tax burden as Indian platforms, domestic players believe the current framework puts them at a disadvantage. While broader tax and startup-friendly policies may benefit the Web3 ecosystem, the lack of crypto-specific measures means the industry will have to continue lobbying for reforms.