What Are the Crypto Tax Expectations for the Indian Union Budget 2026-27?

The Indian Union Budget 2026-27, set to be presented on Sunday, February 1, 2026, is a critical event for digital asset investors hoping for relief from one of the world’s most stringent tax regimes.

While the industry is heavily lobbying for tax rationalization and a reduction in Tax Deducted at Source (TDS) to boost domestic liquidity, market analysts anticipate that the government will likely maintain the status quo to discourage speculative trading.

Current Crypto Tax Framework in India (As of January 2026)

Tax Component	Current Rule
Flat Tax Rate	30% on income from VDA transfers (plus surcharge and cess)
TDS (Section 194S)	1% on total consideration paid for VDA transfers
Expense Deductions	None (only cost of acquisition is allowed)
Loss Provisions	No set-off or carry forward of losses allowed

Industry Demands vs. Government Stance

Key Policy Conflict Areas

Tax Rationalization: Industry seeks alignment with equities; Government views VDAs as speculative assets similar to gambling.
TDS Reduction: Industry pushes for 0.01% or 0.1% to restore liquidity; Government insists 1% is vital for transaction tracking.
Loss Set-off: Investors seek fairness; Government uses "ring-fencing" to discourage retail participation in volatile assets.

Beyond taxation, the 2026 Budget is expected to reinforce the government’s broader strategy regarding the digital economy. The Reserve Bank of India (RBI) will likely continue to receive policy support to promote the e-Rupee (CBDC) as the only safe, sovereign-backed digital currency, positioning it as a stable alternative to private cryptocurrencies like Bitcoin or Ethereum.

"The VDA sector is not seeking deregulation, but clarity and fairness. Budget 2026 presents the government with a critical opportunity to balance innovation with oversight."

Q: Will the crypto tax be reduced in the Indian Budget 2026?
It is highly unlikely. Experts predict the Finance Ministry will maintain the flat 30% rate to ensure revenue stability.

Q: Can I set off crypto losses against gains in India in 2026?
No. If you lose money on Bitcoin but profit on Ripple, you must pay a flat 30% tax on the Ripple profits without deducting the Bitcoin losses.