Crypto Industry Leaders Flag Tax Hurdles, Seek Regulatory Clarity in India

At the Business Standard BFSI Insight Summit 2026 in Mumbai on Tuesday, crypto industry leaders voiced significant concerns regarding the burden of crypto taxation and called for greater regulatory clarity in India. The session, titled ‘Taxed but Not Trusted: Can India Regulate an Asset It Doesn't Recognise?’, highlighted these challenges despite a growing investor interest in digital assets.

Vandana Ahuja, tax partner for financial services at EY India, acknowledged improved clarity on digital asset taxation but noted that certain framework aspects still create difficulties for traders. She specifically pointed out the burden of the 1% TDS, which can be disproportionate to profits for frequent traders. Ahuja stressed the importance of presenting these concerns to the government, especially as tax authorities gain more transaction information through data-sharing agreements with other countries.

SB Seker, APAC head at Binance, observed that discussions around crypto regulation in India have seen little change, even with the country's substantial digital-asset user base. He suggested that market demand is advancing faster than policy discussions, with exchanges proactively developing technology tools to assist regulators in addressing concerns such as fraud prevention and transparency.

Vikaas Sachdeva, CEO of BitDelta India, emphasized India's significance as a market due to its digital-first approach and increasing interest in digital assets, noting adoption from both smaller cities and larger urban centers. He highlighted a shift in investor behavior, with users increasingly viewing digital assets as investments rather than solely for short-term trading. Investors are now more focused on the safety of their money, asset segregation, and personal information protection, indicating a more mature investor base. Vimal Sagar Tiwari, co-founder of CoinSwitch, echoed India's appeal due to its technology adoption and ease of onboarding, stressing the importance of user education.

Panellists also discussed tokenisation, a process that uses blockchain technology to digitally represent assets, potentially expanding financial products available to investors. Tiwari described tokenisation as a crucial blockchain use case, capable of making real-world assets programmable and creating new avenues for financial product access. Sachdeva supported this industry move towards offerings beyond conventional virtual digital assets, suggesting the sector is becoming multi-layered.

Regarding investor protection, Tiwari argued that it should not impede innovation, advocating for platforms to develop new applications while maintaining user safeguards. Seker reiterated that exchanges are already leveraging technology for fraud prevention and providing tools for regulators. The evolving investor questions, focusing on asset safety and personal data, underscore a growing emphasis on trust and risk management within the crypto ecosystem.

What to watch: Further government engagement on tax reforms and the development of a comprehensive regulatory framework.

Editor's note: Excellent work. The draft incorporates all key participants, specific viewpoints, and technical details from the full text provided.