August 01, 2025
By Our Correspondent
According to several official announcements and regulatory updates, India’s Ministry of Finance has reiterated its intention to keep the 30% tax rate on cryptocurrency earnings in place and has ruled out approving Bitcoin exchange-traded funds (ETFs) anytime soon.
This ruling maintains a 2022 rule that levies 1% tax deducted at source (TDS) on transactions over INR 10,000, making compliance even more difficult for companies and investors. The government has chosen regulatory continuity, indicating no immediate changes in its approach to taxing digital assets, despite requests for amendments from industry stakeholders.
Major exchanges and blockchain companies have moved their operations overseas due to the increased uncertainty caused by the lack of a defined regulatory framework for cryptocurrencies. For example, CoinDCX recently disclosed a $44 million heist, while WazirX relocated to Singapore in 2023 after a $230 million cyberattack, highlighting structural flaws in India’s monitoring framework.
Leaders in the industry, such as Siddharth Sogani of Crebaco, have blasted the ambiguity, pointing out that his company had to relocate as a result of years of ineffective policy debates. The Ministry of Finance has not shown any intentions to create a formal regulatory framework, which makes it more difficult for businesses to navigate a confusing legal environment.
In recent months, the Income Tax Department has stepped up its enforcement operations, using the TDS mechanism to keep an eye on transactions and stop tax evasion. Stricter reporting guidelines have been implemented in tandem with this, making it more difficult for investors to hide gains from digital assets. In the meantime, the government has come under fire for impeding policy development by refusing to gather thorough data on crypto activities, even though the TDS system has been in existence for five years.
The current situation stands in contrast to global trends, as regulators are developing frameworks to incorporate digital assets into financial institutions in the United States and other regions. Bitcoin has gained 25% so far in 2025, according to BlackRock’s Investment Institute, which attributes the surge to regulatory momentum in Western economies.
India’s conservative approach, on the other hand, seems to shield its cryptocurrency industry from these global forces, leaving investors and companies in a precarious position as they wait for legislative changes.
