India's top tax body, the Central Board of Direct Taxes (CBDT), is consulting with local cryptocurrency firms to address the country's current digital asset policies. The CBDT is questioning whether the existing 1% tax-deducted-at-source (TDS) on every sale is too high and has also inquired about the impact of the 30% flat tax on market liquidity and trading volumes.
The tax authority is also seeking input on how to create a fair playing field for both domestic and international crypto exchanges and is asking about the legal clarity surrounding derivatives and cross-border transactions. This move has raised hopes among the crypto community for potential tax reforms, which have been a point of contention for local players.
Experts believe that India may be shifting away from its historically skeptical view on crypto. This shift is influenced by pro-crypto laws in other countries, the growth of the global crypto market, and the recent influx of U.S. crypto ETFs. Purushottam Anand, a legal advocate, suggests that a comprehensive virtual digital asset regulation is likely, citing India's G20 discussions and plans for a detailed parliamentary examination of the sector.
While the Reserve Bank of India (RBI) remains cautious, the overall sentiment seems to be changing. Crypto executives have noted that the RBI's stance has moved from negative to neutral, indicating a more open dialogue. This engagement suggests that India is moving toward a more inclusive approach to crypto, aiming for a clear, long-term roadmap that supports both innovation and consumer protection.
August 2025, Cryptoniteuae