Nearly half of Indian crypto investors seek tax relief: Report

As India moves closer to the February 2026 Union Budget, a new nationwide survey highlights rising dissatisfaction among crypto investors with the country’s Virtual Digital Asset (VDA) tax regime. The findings show that investors are not calling for tax removal but are seeking rationalisation and alignment with traditional financial markets. The Tax Survey Report 2026 by CoinSwitch reflects growing concern about fairness, market participation and regulatory clarity.

High awareness, low approval

The survey, based on responses from nearly 5,000 crypto investors across India, shows strong awareness of existing tax rules. Around 88 percent of respondents say they understand the current framework, which includes a 30 percent tax on gains, a 1 percent tax deducted at source on transactions and no provision for loss set off or carry forward. Of these, 66 percent say they are fully aware of the details.

Despite this high awareness, approval levels remain low. About 66 percent of respondents describe the current crypto tax regime as unfair. More than half label it as very unfair. Only around 25 percent consider the system fair, while the remaining respondents stay undecided. The report notes that dissatisfaction is linked to policy structure rather than lack of information.

Impact on investor behaviour

The tax framework appears to be affecting how investors participate in the crypto market. Nearly 59 percent of respondents say they have reduced their crypto trading or investing activity because of taxation. About 17 percent report increased participation, while 16 percent say taxes have not influenced their behaviour.

This trend suggests that the existing tax rules may be discouraging active participation on domestic platforms. The data also raises concerns about trading activity shifting away from regulated Indian exchanges.

Key demands ahead of Budget 2026

Around 48 percent of respondents want the government to reduce the 30 percent tax rate. Others highlight the need for structural changes, including allowing loss set off and carry forward, reducing the 1 percent Tax Deducted at Source and providing clearer compliance guidelines.

Only a small section of respondents believes the current system requires no changes, indicating broad support for reform.

Call for alignment with traditional assets

A major theme in the survey is the demand to treat crypto like other financial assets. About 61 percent of respondents support taxing crypto in line with equities and mutual funds. This includes similar tax rates and the ability to adjust losses.

Fewer respondents support a separate crypto specific tax regime or stricter taxation compared to other asset classes. This points to a shift in perception, with many investors viewing digital assets as part of the mainstream financial system.

Need for regulatory clarity beyond tax

Beyond taxation, regulatory clarity emerges as a key concern. More than 80 percent of respondents say comprehensive regulation beyond tax policy is important. A majority describe it as extremely important. The report highlights that taxation alone cannot support long term confidence or participation in the crypto market.

The survey also shows that most investors rely on crypto platforms, news outlets and social media for updates on crypto policy. Government sources and tax professionals play a smaller role, indicating gaps in official communication.

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