India's Crypto Industry Is Now Making Strong Efforts to Change the Country's Strict Tax Rules

Currently, 30% of the profit from crypto is subject to tax, as is one percent for every transaction. Taxes of this kind were imposed in 2022.

India's crypto sector is actively engaging with the government to adjust the nation's taxing regime on digital assets, aiming to mitigate the impact of the 30% profit tax and 1%.

Despite India introducing these taxes in 2022, a significant portion of crypto trades are reportedly taking place outside the country.

As a result, Indian bitcoin industry players and interested investors are urging the government to adopt a more open approach. They contend that India's high taxes are dissuading investment in the country, leading experts to pursue opportunities elsewhere and ultimately limiting India's role in the burgeoning global digital industry.

According to Financial Times, the Indian government is beginning to show a better tolerance for cryptocurrencies. A key reason is that Donald Trump, a president who supported crypto, could become president once more. The change in administration has appeared to make India more flexible. Consequently, there are weekly or monthly opportunities for crypto businessmen and government officials to come together.

Grant Thornton values the Indian crypto market at about $2.5 billion. But, according to experts, if new regulations and tax reforms are passed, this sector could be more than $15 billion by 2035.

Some within the crypto industry hope that fair tax rules would encourage local traders to stop using foreign platforms. Such a law would drive investment into new blockchain ideas and strengthen India's position in global digital finance.

Although the government hasn’t yet confirmed any plans to cut taxes, the stifling of positive talks is giving the industry reason to hope. Both startups and investors are keeping a close eye on India, hoping it will develop policies that protect and advance both safety and innovation.

The country enjoys a significant edge due to its large population, tech-savvy people and fast-growing connections to foreign markets. If the rules are updated, India might lead the next progress in crypto.

CoinSwitch's Ashish Singhal said the global change in crypto, with Trump's return a good factor, has also impacted India. He believes that a major demand now, especially from the gaming industry, is to reduce what he terms the “very harshly” levied taxes.

Previously, the RBI was known for its stance against the use of cryptocurrencies in India. Banks were banned, beginning in 2018, from any work with crypto companies. However, in 2020, the Supreme Court reversed this ruling. More recently, things have taken a different shape. Despite not having a new term as Governor, Sanjay Malhotra, the present Governor of the RBI, has refrained from any pointed criticism of crypto, and Singhal explained that the perception toward the central bank is no longer seen as very negative.

Interestingly, India is seeing more crypto companies return. Bybit officially registered with Indian authorities in February and has since been able to offer all its services to its users. In March, Coinbase completed the registration process with India's Financial Intelligence Unit. It is a key step that brings the company closer to launching its services in India after a two-year pause.