66% of crypto investors call India’s tax regime unfair, CoinSwitch survey finds

As India prepares for the February 2026 Union Budget, a new nationwide survey of crypto investors suggests growing dissatisfaction with the country’s Virtual Digital Asset (VDA) tax regime, even as investors signal a willingness to comply if the framework is made fairer and more aligned with traditional financial markets. The findings point to a clear demand for rationalisation rather than removal of crypto taxes.

The Tax Survey Report 2026, released by CoinSwitch and based on responses from nearly 5,000 participants across India, shows that awareness of crypto taxation is high, but approval is not. Around 88% of respondents say they are aware of the current tax framework, which includes a 30% tax on gains, a 1% tax deducted at source on transactions, and the absence of loss set-off or carry-forward provisions. Of these, 66% say they are fully aware of the details, indicating that negative sentiment is not driven by lack of information.

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Despite this awareness, perceptions of fairness are sharply critical. Two-thirds of respondents, or 66%, describe the existing crypto tax regime as unfair, with more than half calling it “very unfair.” Only a quarter of respondents believe the system is fair, while the rest remain undecided. The report notes that dissatisfaction appears “structural rather than driven by lack of information,” pointing to deeper concerns about policy design.

The tax framework is also having a tangible impact on investor behaviour. Nearly 59% of respondents say they have reduced their participation in crypto investing or trading as a direct result of taxation. In contrast, 17% report increased participation, while about 16% say taxes have had no impact on their activity. The data suggests that current policies may be discouraging active onshore participation and potentially pushing trading activity away from domestic platforms.

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Looking ahead to Budget 2026, investors are largely united in calling for targeted changes rather than wholesale rollback. Almost half of respondents, 48%, want the overall tax rate lowered from the current 30%. Others are seeking structural fixes, including loss set-off and carry-forward provisions, a reduction in the 1% TDS that many view as a drag on liquidity, and clearer regulatory and compliance guidelines. Only a small minority believe that no changes are required.

A strong theme running through the survey is the desire to normalise crypto within India’s existing financial architecture. Sixty-one percent of respondents favour taxing crypto in line with other financial assets such as equities and mutual funds, including comparable rates and loss adjustment rules. Far fewer support a separate crypto-specific tax regime or stricter taxation than other asset classes, suggesting that investors increasingly view digital assets as a legitimate part of the financial system rather than an outlier.

Beyond taxation, the importance of regulatory clarity emerges as a critical concern. More than four in five respondents say clear and comprehensive regulation beyond tax policy is important, with a majority describing it as “extremely important.” The report underlines that “taxation alone is insufficient to drive long-term confidence and participation,” highlighting the need for a broader, more predictable regulatory framework.

The survey also sheds light on how investors access information on crypto policy. Most rely on crypto platforms, news media and social media, while government sources and tax professionals play a comparatively limited role. This reliance on non-official channels points to gaps in proactive communication from authorities, even as compliance requirements continue to expand.

Despite widespread criticism of the current tax regime, the broader policy outlook remains cautiously optimistic. A majority of respondents believe crypto should be encouraged as a new asset class, while a significant share supports cautious regulation. Only a small fraction favour active discouragement. As the report concludes, investors are not seeking exemptions, but “reform and fine-tuning, not tax exemption,” a signal policymakers may find difficult to ignore as Budget 2026 approaches.