Nearly 90% of Crypto Investors Aware of Tax Rules, But Majority Call Them Unfair: CoinSwitch Survey

As India prepares for the Union Budget in February, a new nationwide survey by CoinSwitch reveals a clear disconnect between high investor awareness of crypto taxation and growing dissatisfaction with the existing framework. The findings point to an informed investor base that is not seeking exemptions, but meaningful rationalisation and regulatory clarity.

According to the CoinSwitch survey, nearly 90% of crypto investors are familiar with India’s current Virtual Digital Asset (VDA) tax regime, including the 30% tax on gains, the prohibition on loss set-off or carry-forward, and the 1% Tax Deducted at Source (TDS) on transactions. Despite this awareness, 66% of respondents believe the current tax structure is unfair, highlighting concerns over rigidity and misalignment with broader financial markets.

Investors Want Rationalisation, Not Tax Holidays

Commenting on the findings, Ashish Singhal, Co-founder of CoinSwitch, said the data reflects a demand for fairness rather than relief. “Investors are not seeking tax exemptions, but rationalisation,” he noted. Survey participants favoured lower tax rates, loss set-off provisions, reduced TDS, and clearer regulatory guidelines aligned with established asset classes such as equities and mutual funds.

The survey suggests that India’s crypto investors are informed, compliance-oriented, and willing to operate within a regulated ecosystem—provided the rules are predictable and market-aligned.

Tax Regime Impacting Market Participation

The existing tax framework is also shaping investor behaviour. A majority (59%) of respondents reported reduced participation in crypto trading or investing due to current taxation norms. This decline raises concerns about the long-term impact on trading volumes, liquidity, and onshore crypto activity in India.

However, the picture is not entirely uniform. About 17% reported increased participation, while 16% said taxes had no impact on their activity. These investors are more likely to be adopting long-term strategies, suggesting that regulatory certainty may outweigh short-term tax considerations for certain segments of the market.

Strong Preference for Mainstream Financial Treatment

A key takeaway from the survey is investor sentiment around how crypto should be taxed. 61% believe VDAs should be taxed similarly to equities or mutual funds, while only 17% support a separate tax framework. This indicates a clear preference for integrating crypto into India’s existing financial system rather than isolating it as a special category.

Regulatory Clarity Seen as Essential

Beyond taxation, regulatory clarity emerged as a critical concern. Over 80% of respondents said clear regulation is important, with 60% rating it as extremely important. The data underscores a widely held view that tax reform alone will not be sufficient to build sustained confidence in India’s digital asset ecosystem.

The survey also highlights how investors stay informed: 30% rely on crypto platforms and exchanges, followed by news media (27%) and social media (25%), emphasizing the role of platforms and policymakers in providing consistent, authoritative guidance.

Policy Sentiment Favors Enablement

Overall, investor sentiment leans toward enablement rather than restriction. 51% of respondents believe crypto should be encouraged as a new asset class in India, signaling support for innovation within a well-regulated framework.

As Budget 2026 approaches, the findings send a clear message: India’s crypto investors are ready to comply—but are calling for fairness, clarity, and alignment with global financial norms.

See the full report here.