Budget 2026 Could Be India’s Crypto Turning Point, CoinDCX CEO Drops Big Hints

Can Budget 2026 Turn India From Crypto Adopter Into a Global Crypto Hub?

India has already proven it can adopt cryptocurrency at scale. The bigger question now is whether it can turn that massive adoption into long-term leadership.

As consultations begin for the Union Budget 2026–27, India’s fast-growing digital asset industry is pushing for meaningful reform, arguing that the next budget could decide whether the country becomes a global crypto hub or continues to lose innovation to offshore markets.

Industry leaders say Budget 2026 represents a rare opportunity to recalibrate crypto policy, particularly around taxation, investor protection, and regulatory clarity. The stakes are high. India ranks at the top of global crypto adoption indexes, yet many domestic platforms struggle under what industry executives describe as one of the world’s most restrictive tax regimes.

Crypto Policy Returns to the Spotlight Ahead of Budget 2026

With the Finance Ministry inviting public and industry input ahead of Budget 2026, cryptocurrency regulation has returned to the center of the policy debate.

Source: Official X

Sumit Gupta, chief executive of CoinDCX, has publicly described the upcoming budget as a “reset moment” for India’s digital asset ecosystem. In comments shared through social media and policy discussions, Gupta urged lawmakers to reconsider current crypto tax rules, arguing that existing policies discourage transparency, suppress domestic trading volumes, and push users toward offshore platforms.

According to industry representatives, the issue is no longer about whether crypto should be regulated. That question, they say, has already been answered. Instead, the focus has shifted to how regulation can be structured to protect investors while supporting innovation and economic growth.

The Tax Debate: Why Industry Wants Change

At the heart of the debate are three tax-related issues that have drawn consistent criticism from crypto exchanges, investors, and policy analysts.

The first is the 1 percent tax deducted at source (TDS) applied to every crypto transaction. Introduced to improve traceability, the levy has had unintended consequences. Industry data suggests the tax has significantly reduced trading volumes on Indian exchanges while encouraging users to move activity to overseas platforms where Indian tax rules are harder to enforce.

Industry leaders are calling for a reduction of the TDS rate to 0.01 percent. They argue this would preserve transaction-level tracking without draining liquidity from domestic markets.

The second concern involves India’s flat 30 percent tax on crypto capital gains. Unlike stocks or mutual funds, crypto gains are not taxed according to income slabs. This means retail investors and high-income earners face the same tax rate, a structure critics say undermines fairness and discourages long-term participation.

Proposals under discussion include aligning crypto taxation with standard income tax slabs, a move supporters believe would encourage compliance and reward responsible investment behavior.

The third issue is the lack of loss set-off provisions. Under current rules, crypto losses cannot be offset against gains or other income, a restriction that does not apply to most traditional asset classes. Industry advocates argue this places crypto investors at a structural disadvantage and increases overall investment risk.

What Exchange Data Says About the Market

As policymakers weigh potential reforms, industry leaders are backing their proposals with operational data.

Source: X (formerly Twitter)

CoinDCX co-founder Neeraj Khandelwal recently highlighted figures from the exchange’s December 2025 transparency report. According to the data, the platform serves more than 21 million users and has already contributed over ₹13 crore in TDS payments to the government. The exchange also reports holding more than $500 million in reserves under a proof-of-reserves framework.

In addition, CoinDCX maintains a Crypto Investor Protection Fund valued at over ₹55 crore, designed to protect users against unforeseen risks. Industry representatives say these figures demonstrate that regulated Indian exchanges are capable of operating transparently while contributing meaningfully to government revenue.

They argue that smarter tax design could expand this contribution rather than limit it.

India’s Adoption Is Strong, but Leadership Remains Elusive

India’s crypto adoption story is already one of the strongest in the world. Millions of users participate in digital asset markets, and crypto investment plans similar to systematic investment plans have grown rapidly over the past year.

However, adoption alone does not guarantee leadership. Industry experts warn that without reform, India risks becoming a consumption market rather than a center for innovation, product development, and institutional investment.

Several countries, including Singapore, the United Arab Emirates, and parts of Europe, have positioned themselves as crypto-friendly jurisdictions by offering regulatory clarity and competitive tax structures. Indian entrepreneurs, developers, and capital have increasingly looked to these regions to scale their operations.

Supporters of reform believe Budget 2026 could help reverse this trend by encouraging companies to build, hire, and innovate domestically.

Investor Protection and Regulatory Balance

While the industry is pushing for tax relief, executives emphasize that reform should not come at the expense of investor protection.

Calls for clearer regulatory frameworks include standardized compliance requirements, stronger custody rules, and clearer definitions for different types of digital assets. Many industry leaders say regulation should focus on transparency and consumer safety rather than punitive taxation.

They argue that a balanced approach could reduce fraud, improve oversight, and integrate crypto more effectively into India’s broader financial system.

Why Budget 2026 Could Be a Turning Point

Economists and policy observers note that Budget 2026 arrives at a critical moment. Global crypto markets are maturing, institutional participation is increasing, and governments worldwide are refining their regulatory approaches.

For India, the choices made in the upcoming budget could determine whether the country becomes a policy leader or continues to lag behind despite its massive user base.

Supporters of reform believe modest, targeted changes could unlock significant growth, bring more activity onshore, and strengthen India’s reputation as a technology-driven economy.

Conclusion

Budget 2026 may not decide the future of cryptocurrency in India on its own, but it could set the direction for years to come.

By addressing long-standing concerns around taxation, fairness, and investor protection, the government has an opportunity to convert India’s global adoption lead into genuine leadership. The challenge lies in crafting policies that encourage innovation without compromising financial stability.

As consultations continue, the crypto industry is watching closely. Whether India becomes a true global crypto hub may depend on what decisions emerge from this year’s budget debate.

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