Most Indian Crypto Investors Favor Stock-Like Tax Rules

Source: CryptoTale Original Title: Most Indian Crypto Investors Favor Stock-Like Tax Rules Original Link:

Survey Findings on Indian Crypto Tax Preferences

A CoinSwitch survey released ahead of India’s February 1 Union Budget shows significant calls for crypto tax reform. Key findings include:

• 61% of Indian crypto investors want crypto taxed like stocks or mutual funds
• 17% support a separate tax framework for crypto
• 90% understand the 30% tax and 1% TDS rules
• 66% describe the current crypto tax system as unfair
• 59% have reduced crypto investing or trading due to tax rules
• 80% say clear regulatory rules are essential for investor confidence

Demand for Equity-Style Crypto Tax Treatment

The CoinSwitch survey indicates many investors want crypto brought into India’s mainstream financial taxation framework. Respondents most often backed tax treatment aligned with equities and mutual funds, rather than a standalone Virtual Digital Assets (VDAs) structure.

Ashish Singhal, Co-founder of CoinSwitch, framed the demand as rationalization, not relief. Respondents do not seek exemptions but want a fairer policy. They seek “rationalisation,” including lower rates, loss set-off provisions, reduced transaction deductions, and clearer rules aligned with established markets.

The responses show investors rank both taxation and regulation as key budget issues. However, opinion splits on how to structure the rules, with about 17% wanting a separate crypto tax regime.

Investors also signalled broader policy preferences. In the survey, 51% said India should encourage crypto as a new asset class, while 30% backed cautious regulation. Only 7% favoured active discouragement.

Fairness Concerns Despite High Awareness

The survey reported high awareness of India’s current crypto tax provisions. Nearly 90% said they understand core rules, including the headline rates and key limitations. These provisions include a 30% tax on gains, restrictions on loss set-off and carry-forward, and a 1% TDS on transactions.

Still, most investors described the framework as unbalanced. Sixty-six percent said the current crypto tax system is unfair, despite widespread awareness of how it works.

Singhal said the findings indicate investors remain informed and willing to comply. They want a fair and predictable framework that aligns with established financial markets and reflects market realities.

Taxation appears to shape behaviour in the market. About 59% said they reduced crypto investing or trading because of the prevailing rules, pointing to potential impacts on trading volumes and liquidity. However, not all investors pulled back—17% increased participation, 16% said tax rules did not affect activity, and 8% reported other impacts.

Regulatory Clarity as a Priority

Beyond taxation, respondents stressed the need for clearer crypto regulation in India. Over 80% said clear rules matter, and 60% rated regulatory clarity as extremely important for investor confidence.

Many investors linked market participation to predictable rules for VDAs, alongside clear compliance expectations. Information channels emerged as a key theme in the poll. Crypto platforms and exchanges served as the primary source for updates at 30%, followed by news media at 27% and social media at 25%. Another 18% relied on other sources for guidance on taxes and regulations.

Singhal said clearer regulation could support compliant onshore participation and a more transparent digital asset ecosystem. As the Union Budget approaches, the survey suggests investors will watch for signs of tax rationalisation and regulatory clarity. Any policy shift could influence participation patterns and the direction of India’s VDA market.