Budget 2026: UAE and Singapore 0%, India 30% – Will Crypto Investors Get Tax Relief?

The Union Budget 2026 is set to be presented tomorrow, February 1. The cryptocurrency industry is hopeful that the government may offer tax relief or other measures to support crypto investors.

Taxation on Cryptocurrency

New Delhi: Despite the extreme volatility in cryptocurrency markets, interest in digital assets continues to grow in India. However, unclear regulations and heavy taxation have made investing in cryptocurrencies and Virtual Digital Assets (VDAs) both challenging and expensive.

With Budget 2026 around the corner, the crypto community has high expectations. Investors, industry experts, and tax professionals alike are hoping for a more investor-friendly approach. The key question remains whether the upcoming budget will bring a turning point in crypto taxation or maintain the status quo.

Expectations from Budget 2026

The government has not formally announced any proposals regarding cryptocurrencies. However, there is optimism that the budget may focus on simplifying taxation rather than making it stricter—especially as India’s digital asset ecosystem matures.

Expert Opinions

Mohit Gupta, Partner at PNAM & Co LLP, notes that a major expectation is the simplification of the 1% TDS under Section 194S. Industry stakeholders argue that the current TDS rate affects liquidity, widens the gap between buying and selling prices, and drives trading to foreign platforms. Reducing the rate or increasing the threshold could provide much-needed relief.

Currently, losses from VDA transactions cannot be set off against gains from other VDAs, nor can they be carried forward to subsequent years. Dr. Suresh Surna explains that this means taxes are levied on total profits without accounting for real economic losses, which is unfair to investors. A more balanced approach would allow losses within the VDA category to be offset and carried forward for several years, such as 4 or 8 years.

Current Crypto Tax Regime

Under Section 115BBH of the Income Tax Act, 1961, any transfer of cryptocurrencies or VDAs is taxed at a flat rate of 30%, plus applicable surcharge and cess. Additionally, to prevent tax evasion, Section 194S imposes a 1% TDS on crypto transfers exceeding ₹10,000 in a financial year.

India’s Rules vs. the World

Aishwarya Gupta, Global Head of Payments and RWAs at Polygon Labs, compares India’s crypto tax regime with global norms. India currently has one of the strictest tax systems for digital assets. While profits from cryptocurrencies are taxed at 30% in India, countries like the UAE and Singapore impose no taxes on crypto gains. The industry hopes the government will consider offering tax relief to crypto investors in the upcoming budget.