Indian lawmaker observes a contradictory situation regarding cryptocurrencies., 2026/02/11 14:55:35

Member of the upper house of India’s parliament, Raghav Chadha, has criticized the authorities for imposing taxes on cryptocurrency transactions without, as he stated, a clear regulatory framework governing the use of digital assets.

Chadha addressed the parliament, reminding that Indian traders are subjected to a fixed tax rate of 30% on profits from the sale of crypto assets, in addition to a 1% tax deducted at source (TDS) on all transactions exceeding 10,000 Indian rupees (approximately $110). The legislator views this as a paradoxical situation, as the authorities collect taxes from traders without legally recognizing the status of cryptocurrencies and without laws that would protect investors and combat money laundering through crypto assets.

“India taxes virtual digital assets as if they are legal. Yet, it regulates cryptocurrencies as if they are illegal,” Chadha expressed his discontent.

The outcome of this paradoxical situation is the exodus of Indian investors to offshore crypto platforms and the departure of around 180 crypto startups from the country, the elected representative stated. He proposed the development of requirements for crypto companies and the establishment of a so-called regulatory sandbox, a special zone where virtual assets would have a distinct status. This is expected to safeguard investor interests and generate billions of dollars in annual tax revenues for the government, Chadha believes.

According to the Indian analytics center Esya Centre, the country risks losing over $2 billion in tax revenues from crypto transactions over the next five years due to excessively high taxes, which are driving local traders to foreign exchanges.