Previous lawmakers are calling for crypto tax reform and clear regulations.

Indian crypto users continue to struggle with high taxes and lack of clear regulations. Former MP Ritesh Panday is once again fighting the Indian crypto community, urging the government to cut taxes by 30%, remove 1% TD and introduce clear regulations.

Overregulation could kill the possibility of India’s Web3

He explained three steps to buying an NFT: purchasing a crypto, transferring it to a wallet, and how to make a purchase using current rules. He warned that this type of policy could create a deficit, curb innovation and kill growing youth-driven industries.

India could lead Web 3.0 with many startups and unicorns. But such severe regulations choke innovation before it grows.

Crypto tax burden in India continues to rise

India does not yet have laws regulating crypto, but strict taxes are already in place. Indian crypto users face sudden tax burdens. There is a 30% tax on profits earned from crypto transactions. Next, you get a 1% TDS for every sales transaction, regardless of the amount.

From July 7th, 2025, things have become even more severe. BYBIT will start billing 18% GST on almost all cryptographic services, including trading, staking, withdrawals, deposits, token swaps and more.

Heavy tax driving $42 billion in offshore volume

CoindCX CEO Sumit Gupta points out that the 1% TDS rule is doing more harm than good. He revealed that it has driven over 5 million Indian users onto the offshore platform, moving overseas trading volumes of $42 billion between July 2022 and July 2023. As a result, the government lost an estimated $4.2 billion in revenue, collecting only $31 million via TDS.

Many Indians use foreign crypto platforms to trade. The Indians traded Rs 263,000 in just 10 months, skipping taxes of Rs 2,600. If this continues, the loss could soon exceed Rs 17,000.

Lack of regulations, weak tracking, and rising security concerns

Cryptocurrency is not yet regulated in India. Platforms must be registered under the Anti-Money Laundering Act, but many cannot comply. Moreover, major security violations in exchanges such as CoindCX and Wazirx raise serious concerns about the safety of user assets.

Bethdi, India does not have a real-time system to track whether people are reporting their crypto income honestly. Since the crypto tax regulations were launched (2022-23), the government has raised over Rs 700, but has not estimated how much money will be lost due to underreporting.

Tax officers have acquired trained blockchain, digital forensics and related fields. However, experts doubt whether this training is sufficient to keep up with the rapidly moving world of crypto.

Coin Law 2025: Bold Blueprints

But efforts are underway. Hashed Emergent recently introduced Coins Act 2025, a bold, rights-based crypto proposal. It calls for self-reliant rights, tax reform and dedicated regulators. It’s not a law yet, but it’s a powerful blueprint for making India a true Web3 leader.