Crypto Taxes in India and Around the World: What Every Investor Needs to Know Now
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Cryptocurrency has come a long way in the past decade. Once considered niche and experimental, it’s now a booming asset class drawing the attention of everyday investors, tech entrepreneurs, and governments worldwide. But as the digital asset space evolves, one major challenge remains: taxation.
In India especially, crypto taxes have become a hot topic. Investors, traders, and even industry insiders are raising questions about how these policies are impacting participation and innovation. Here's a closer look at how crypto taxes work in India, what’s happening globally, and why many believe it's time for change.
India’s Current Crypto Tax Rules: A Tough Road for Investors
In 2022, India introduced its first official tax rules for cryptocurrencies. Under the current system, any profits made from selling digital assets—whether Bitcoin, Ethereum, or any other token—are taxed at a flat 30% rate. This applies no matter how long you’ve held the asset or what your income level is.
But that’s not all. There’s also a 1% TDS (Tax Deducted at Source) on every single crypto transaction above ₹10,000 in a financial year. So, even if you’re making small trades, you’re still affected.
While the government’s aim was to regulate the industry, many investors feel this setup is too harsh. The biggest concern? You can’t offset your crypto losses against gains. So, if you lose money on one trade and make money on another, you still have to pay tax on the gains without deducting your losses.
Industry Perspective: Insights from Bybit India’s Vikas Gupta
Vikas Gupta, Country Manager for Bybit India, has voiced concerns that many in the industry share. According to him:
“India’s current crypto tax framework, which includes a flat 30% tax on gains and a 1% TDS on each transaction, has made active trading difficult for many investors. These rules do not allow for loss offsets or differentiate between short-term and long-term holdings. As a result, crypto is being treated more like a speculative transaction income rather than as a serious investment class.”
He also points out another major problem—unclear asset classification. Right now, there’s no agreement on whether crypto should be treated as a currency, commodity, or security. And that’s a problem.
“The absence of clear asset classification further complicates the matter. Without clarity on whether crypto is a commodity, security, or currency, there is an ongoing uncertainty in how it should be treated under financial laws such as FEMA and PMLA. These gaps add to investor hesitation and limit institutional confidence.”
What Other Countries Are Doing Differently
While India’s tax policy is strict, other countries have taken more balanced approaches.
Europe’s MiCA Regulation: A Model for Others?
The MiCA (Markets in Crypto-Assets) regulation introduced by the European Union is gaining attention as a well-structured model. It creates a unified legal framework for all EU countries, ensuring that digital asset users and service providers have clear guidelines to follow.
This kind of clarity is exactly what many Indian investors are hoping for. A more predictable and transparent environment could help the country position itself as a leader in the digital economy.
What India Could Do Next
India is one of the world’s largest crypto markets in terms of user base. But if the goal is to lead in Web3 and blockchain innovation, experts say reforms are needed—especially around taxation and classification.
Here’s how Vikas Gupta puts it:
“Globally, several jurisdictions are moving towards a framework that combines investor protection with policy clarity. Europe’s MiCA regulation, for example, brings a unified structure that offers legal clarity to both users as well as service providers. This has helped create a more stable and transparent environment for digital asset innovation. As part of an evolving global market, India has the opportunity to take similar steps by reviewing tax policies, refining asset classification, and encouraging responsible participation in the fast-growing digital economy.”
Crypto taxation is no longer a niche issue—it’s central to how the industry grows in any country. In India, high tax rates and ambiguous rules have made things difficult for traders, startups, and even large institutions. Meanwhile, other countries are showing that it’s possible to support both innovation and investor safety with better policy frameworks.
For Indian policymakers, the road ahead includes not just regulation, but also listening to the community, learning from global models, and building a system that allows crypto to thrive while staying within legal boundaries.
In India especially, crypto taxes have become a hot topic. Investors, traders, and even industry insiders are raising questions about how these policies are impacting participation and innovation. Here's a closer look at how crypto taxes work in India, what’s happening globally, and why many believe it's time for change.
India’s Current Crypto Tax Rules: A Tough Road for Investors
In 2022, India introduced its first official tax rules for cryptocurrencies. Under the current system, any profits made from selling digital assets—whether Bitcoin, Ethereum, or any other token—are taxed at a flat 30% rate. This applies no matter how long you’ve held the asset or what your income level is.But that’s not all. There’s also a 1% TDS (Tax Deducted at Source) on every single crypto transaction above ₹10,000 in a financial year. So, even if you’re making small trades, you’re still affected.
While the government’s aim was to regulate the industry, many investors feel this setup is too harsh. The biggest concern? You can’t offset your crypto losses against gains. So, if you lose money on one trade and make money on another, you still have to pay tax on the gains without deducting your losses.
Industry Perspective: Insights from Bybit India’s Vikas Gupta
Vikas Gupta, Country Manager for Bybit India, has voiced concerns that many in the industry share. According to him: “India’s current crypto tax framework, which includes a flat 30% tax on gains and a 1% TDS on each transaction, has made active trading difficult for many investors. These rules do not allow for loss offsets or differentiate between short-term and long-term holdings. As a result, crypto is being treated more like a speculative transaction income rather than as a serious investment class.”
He also points out another major problem—unclear asset classification. Right now, there’s no agreement on whether crypto should be treated as a currency, commodity, or security. And that’s a problem.
“The absence of clear asset classification further complicates the matter. Without clarity on whether crypto is a commodity, security, or currency, there is an ongoing uncertainty in how it should be treated under financial laws such as FEMA and PMLA. These gaps add to investor hesitation and limit institutional confidence.”
What Other Countries Are Doing Differently
While India’s tax policy is strict, other countries have taken more balanced approaches. - In the United States, crypto is treated like property. Capital gains tax applies, but the rate changes based on how long you’ve held the asset.
- The UK classifies crypto as property too and applies Capital Gains Tax for individuals and Corporation Tax for businesses.
- In Germany, if you hold your crypto for more than a year, any gains are completely tax-free. This encourages long-term investment.
- Portugal has been known for its relaxed crypto tax policies, though it’s now tightening up regulations.
- And in the UAE, investors can enjoy a zero-tax environment on crypto profits, especially in free zones like Dubai.
Europe’s MiCA Regulation: A Model for Others?
The MiCA (Markets in Crypto-Assets) regulation introduced by the European Union is gaining attention as a well-structured model. It creates a unified legal framework for all EU countries, ensuring that digital asset users and service providers have clear guidelines to follow. This kind of clarity is exactly what many Indian investors are hoping for. A more predictable and transparent environment could help the country position itself as a leader in the digital economy.
What India Could Do Next
India is one of the world’s largest crypto markets in terms of user base. But if the goal is to lead in Web3 and blockchain innovation, experts say reforms are needed—especially around taxation and classification.Here’s how Vikas Gupta puts it:
“Globally, several jurisdictions are moving towards a framework that combines investor protection with policy clarity. Europe’s MiCA regulation, for example, brings a unified structure that offers legal clarity to both users as well as service providers. This has helped create a more stable and transparent environment for digital asset innovation. As part of an evolving global market, India has the opportunity to take similar steps by reviewing tax policies, refining asset classification, and encouraging responsible participation in the fast-growing digital economy.” Crypto taxation is no longer a niche issue—it’s central to how the industry grows in any country. In India, high tax rates and ambiguous rules have made things difficult for traders, startups, and even large institutions. Meanwhile, other countries are showing that it’s possible to support both innovation and investor safety with better policy frameworks.
For Indian policymakers, the road ahead includes not just regulation, but also listening to the community, learning from global models, and building a system that allows crypto to thrive while staying within legal boundaries.
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