CoinDCX co-founder Sumit Gupta has called for India’s 1% crypto transaction tax to be reduced to 0.01%, warning that the current regime is driving trading offshore and costing the government revenue.
Sumit Gupta, co-founder of CoinDCX, has renewed pressure on India’s government to soften its crypto tax regime, arguing that the current framework is pushing trading activity offshore and weakening the country’s own revenue base. In a post on X, Gupta backed calls to cut the 1% tax deducted at source on crypto transactions to 0.01%, saying the present rules are driving users away from domestic exchanges and making collection harder for the authorities.
India’s current structure taxes crypto gains at 30% while also levying 1% TDS on transactions, with no provision for offsetting losses against gains. Industry leaders say that combination has made active trading expensive and administratively awkward, particularly for participants who trade frequently and need ready access to capital. According to Moneycontrol, Gupta has also argued for lifting the annual TDS threshold to ₹5 lakh, a move he says would ease pressure on smaller traders and encourage more activity to remain onshore.
The case for reform is being sharpened by figures cited in a report from TIOL Knowledge Foundation, which CoinDCX shared. The report says India has missed about ₹19,049 crore in TDS since the rules were introduced in July 2022 and estimates total crypto-related tax revenue losses at ₹57,147 crore when broader capital gains effects are included. It also says uncollected TDS in the current financial year could reach ₹9,001 crore, far above the amount collected in the previous year. The report argues that lowering TDS could bring trading back to domestic platforms and, over time, generate far more capital gains tax revenue.
The debate is unfolding as India prepares for another budget season in which the crypto industry is again pressing for tax rationalisation, loss set-off rules and clearer regulation. Coverage by Moneycontrol and Fortune India shows that industry voices want a framework that treats domestic exchanges more competitively than offshore rivals, while also providing legal certainty for investors and platforms. Supporters of reform say India can only build a stronger Web3 and digital-asset sector if tax policy stops pushing volume, liquidity and innovation out of the country.
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