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India’s ₹6,000 Cr Crypto Tax Loss

Author: Content Editor
India is losing a significant amount of tax revenue due to its current crypto tax policies, with traders moving to foreign platforms to avoid the 1% TDS (Tax Deducted at Source) introduced in July 2022. As a result, the country has missed out on ₹6,000 crore in taxes and could lose an additional ₹17,700 crore over the next five years. The government has blocked nine major offshore platforms, but only one has complied with the TDS rules. Traders have found ways to bypass restrictions, leading to a 77% rise in activity on foreign platforms compared to just 21% growth on local exchanges. The Esya Centre has proposed reforms to make crypto trading more attractive in India and retain tax revenue, including reducing the TDS rate and implementing a self-declaration system to increase compliance. Implementing these changes could generate ₹9,169 crore to ₹18,338 crore in tax revenue over five years and strengthen the domestic crypto ecosystem. Creating a balanced and trader-friendly tax policy is crucial for India to benefit from the crypto market, boost investor trust, retain capital, and unlock the full potential of the crypto economy.

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