India’s Web3 Industry Calls Crypto Taxes “Unfair” Ahead of Budget 2026
India’s Bharat Web3 Association Urges Fair Crypto Taxes and Clear Rules Ahead of 2026 Budget
India’s crypto and Web3 industry is once again pushing for policy reform as the country prepares for its 2026 Union Budget. During a recent pre-budget consultation, the Bharat Web3 Association called on the government to introduce fairer cryptocurrency taxation, improve banking access for digital asset firms, and establish clearer regulatory frameworks to support long-term innovation.
The meeting, held with officials from India’s finance ministry, reflects growing concern within the domestic Web3 ecosystem that existing policies are slowing growth rather than improving compliance. Industry leaders argue that India risks falling behind other major economies unless regulatory clarity and tax reform are addressed in the upcoming budget cycle.
According to reporting reviewed by hokanews, the discussion comes at a critical moment for India’s digital economy, as global competition for blockchain talent and capital continues to intensify.
What the Bharat Web3 Association Is Asking For
At the center of the conversation is crypto taxation. Since 2022, India has imposed a 30 percent tax on gains from virtual digital assets, along with a 1 percent tax deducted at source on every transaction. While authorities introduced these measures to improve transparency and track trading activity, industry representatives say the approach has produced unintended consequences.
During the pre-budget meeting, the Bharat Web3 Association told policymakers that current tax rules are discouraging participation and pushing trading activity offshore. This position was echoed by analysts and researchers commenting on the discussion, including observations shared by Crypto India on X, which confirmed the details of the meeting.
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| Source: Xpost |
According to that commentary, the association urged the government to lower the transaction-based TDS rate, allow traders to offset losses against gains, and treat crypto income more in line with other asset classes. Industry leaders argue that such changes would encourage voluntary compliance while keeping activity within India’s regulated financial system.
Banking Access Remains a Key Pain Point
Beyond taxation, banking access was another major issue raised during the consultation. Despite crypto trading being legal in India, many Web3 companies continue to face difficulties maintaining stable banking relationships. Several firms report delays in opening accounts, sudden service withdrawals, or heightened scrutiny that disrupts normal operations.
The Bharat Web3 Association warned that limited banking access undermines legitimate businesses and discourages international firms from establishing operations in India. Without reliable access to traditional financial services, startups struggle to pay employees, process customer transactions, and comply with reporting requirements.
Industry representatives emphasized that improved coordination between regulators and banks could help address these issues without compromising oversight. Clear guidelines, they argue, would reduce uncertainty for both financial institutions and crypto companies.
Calls for Regulatory Clarity
A lack of clear regulation remains one of the most persistent challenges facing India’s Web3 sector. While the government has acknowledged the importance of digital assets, comprehensive legislation defining their legal status and oversight mechanisms has yet to materialize.
At the pre-budget meeting, the Bharat Web3 Association called for a clear regulatory framework that distinguishes between different types of digital assets and activities. This includes separating speculative trading from infrastructure development, decentralized applications, and enterprise blockchain use cases.
Supporters of reform argue that clarity would help investors, developers, and regulators align expectations. It would also allow India to better position itself in global discussions around digital asset governance, particularly as countries like the United States, the European Union, and Singapore move forward with more detailed regulatory regimes.
Why the 2026 Budget Matters
India’s annual budget has become an increasingly important signal for the crypto industry. While major legislative changes are unlikely to be introduced through the budget alone, tax adjustments and policy signals can significantly influence market sentiment.
For Web3 advocates, the 2026 budget represents an opportunity for incremental but meaningful progress. Even modest changes, such as reducing the TDS rate or clarifying reporting requirements, could improve liquidity and encourage onshore activity.
Market observers note that the government faces a delicate balancing act. On one hand, it must address concerns about financial stability, consumer protection, and illicit activity. On the other, it must ensure that India remains competitive in a rapidly evolving digital economy.
Industry Voices Warn of Missed Opportunities
Several analysts have warned that India’s strict tax regime has already driven trading volume to overseas platforms. This migration not only reduces domestic liquidity but also limits the government’s ability to monitor and tax crypto activity effectively.
According to industry estimates, a significant portion of Indian crypto trading now takes place on offshore exchanges. Advocates argue that easing tax pressure could reverse this trend and bring activity back under domestic oversight.
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| Source: Xpost |
The comments shared by Crypto India Research on X highlighted this concern, noting that high taxes are slowing the market rather than achieving their intended compliance goals. While such commentary reflects industry sentiment rather than official policy, it underscores the urgency of the issue ahead of the budget.
Government Perspective and Global Context
Indian officials have consistently emphasized the need for a cautious approach to digital assets, citing risks related to volatility, consumer harm, and cross-border flows. The country has also played a prominent role in global discussions on crypto regulation through forums such as the G20.
However, global attitudes toward crypto are evolving. Several jurisdictions are experimenting with balanced frameworks that combine oversight with innovation support. Industry leaders believe India can draw lessons from these examples while tailoring solutions to its own economic context.
The finance ministry has not yet indicated whether specific crypto-related changes will be included in the 2026 budget. Still, the decision to engage with industry groups like the Bharat Web3 Association suggests a willingness to listen to stakeholder concerns.
What Comes Next
As budget preparations continue, Web3 companies and investors will be closely watching for signals from policymakers. While sweeping reform may be unlikely in the short term, incremental steps could lay the groundwork for a more sustainable regulatory environment.
For now, the Bharat Web3 Association’s intervention has helped refocus attention on the practical challenges facing India’s crypto sector. Whether these concerns translate into concrete policy changes will become clearer when the budget is presented.
Conclusion
The call by the Bharat Web3 Association for fair crypto taxation, improved banking access, and regulatory clarity highlights a growing tension between innovation and oversight in India’s digital economy. As the 2026 Union Budget approaches, the government faces mounting pressure to strike a balance that supports growth without compromising stability.
Industry leaders argue that reform is not about special treatment, but about aligning crypto policy with broader economic goals. If addressed thoughtfully, the upcoming budget could mark a step toward a more competitive and transparent Web3 ecosystem in India. If not, critics warn, the country risks losing momentum in one of the most transformative sectors of the global economy.
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