India Reconsiders Crypto Stance Amid Global Shifts

India is reevaluating its stance on cryptocurrency regulations, with a senior government official revealing that the long-anticipated discussion paper on digital assets may be delayed. This reconsideration comes as major global shifts in crypto policies are being observed, including the U.S. pivoting towards a more crypto-friendly approach under President Donald Trump.

India's Economic Affairs Secretary Ajay Seth acknowledged the changing landscape of cryptocurrency, stating that the country is reviewing its discussion paper on digital assets. He noted that digital assets do not recognize borders, indicating that India's crypto strategy cannot be shaped in isolation.

Meanwhile, the Indian government has shown no signs of easing the tax burden on crypto traders in the 2025 Union Budget. Finance Minister Nirmala Sitharaman proposed amendments that would bring undisclosed crypto gains under Section 158B of the Income Tax Act, allowing retrospective audits on transactions dating back 48 months. Investors who have failed to report gains within the last 48 months could face a 70% penalty on unpaid taxes.

The 30% tax on crypto gains remains in place, with no exemptions, deductions, or differentiation between short-term and long-term holdings. The controversial 1% Tax Deducted at Source (TDS) on every crypto transaction also stays, further discouraging active trading within the country.

The response from India's crypto industry has been mixed. CoinDCX CEO Sumit Gupta applauded the government's decision to revisit its crypto policy but urged for friendlier regulations and clarity. CoinSwitch co-founder Ashish Singhal called the budget a "mixed bag for crypto," pointing out that while the mandatory reporting of crypto transactions was a step toward legitimacy, the lack of tax relief was a major disappointment.

Crypto traders and investors are now awaiting the upcoming simplified Income Tax Act, set to be introduced in Parliament next week, for any last-minute surprises. As India rethinks its strict crypto regulations, the tax burden persists, leaving the crypto industry in a state of uncertainty.