Lobbying for Relief: India’s Crypto Industry Pushes for Tax Cuts Amid Hopeful Thaw

India’s crypto industry is stepping up its efforts to seek relief from heavy taxation. With a 30 percent tax on profits and a 1 percent levy on every transaction, traders and exchanges argue that the current system is discouraging participation and driving activity underground. As policy discussions slowly reopen, industry players are hopeful that a more balanced tax regime could create a healthier environment for investors, especially in smaller cities.

The demand for change is rooted in everyday challenges faced by traders. For small investors in Tier 2 towns like Nagpur, Bhopal and Jaipur, the 1 percent transaction levy eats into profits, making frequent trading almost unviable. Many argue that this policy penalizes genuine users while pushing some to unregulated platforms. Exchanges, too, have seen reduced trading volumes, raising concerns about long-term sustainability.

Industry leaders have begun lobbying for a tax structure similar to that of equities, which could make crypto a more practical investment option. They stress that high taxation not only limits financial participation but also risks pushing talent and innovation abroad. Start-ups in blockchain and crypto services say they are losing ground to global competitors because of the restrictive environment at home.

On the other hand, policymakers remain cautious. Concerns about money laundering, investor protection and volatility keep authorities from offering immediate relief. The government has so far maintained that taxation is necessary to regulate the sector until a clearer legal framework is established. Still, the ongoing dialogue between industry groups and officials suggests there may be room for negotiation.

For investors in smaller cities, where crypto often doubles as a side income, even a minor tax adjustment could bring significant relief. Many youths see digital assets as an accessible way to participate in global markets, and a friendlier tax policy could support this growing interest without exposing them to unchecked risks.

The push for tax cuts highlights a critical stage in India’s crypto journey. The industry is no longer asking for complete freedom but for fairer terms that allow innovation and participation to flourish. Whether the government responds with flexibility will determine if India can strike a balance between regulation, revenue, and the aspirations of its new generation of investors.