Bharat Web3 Presses Crypto Tax Issues Before Budget 2026

• India reviews 30% crypto tax and 1% TDS as industry presses for relief ahead of budget.
• Web3 firms flag banking access hurdles despite legal crypto trading status in India.
• Lack of clear crypto rules clouds planning as Budget 2026 approaches for industry.

India’s crypto policy debate resurfaced during a pre-budget consultation held in New Delhi earlier this month. The Bharat Web3 Association met officials from India’s finance ministry to raise concerns ahead of the 2026 Union Budget. The discussion focused on crypto taxation, banking access for Web3 firms, and the absence of clear regulatory frameworks.

Taxation Main Topic in Pre-Budget Talks

The meeting placed crypto taxation as the main topic of the policy discussion. Since 2022, India has applied a 30 percent tax on virtual digital asset gains. In addition, authorities enforce a 1 percent tax deducted at source on every transaction.

Government officials originally framed these measures as tools for transparency and compliance. However, industry participants continue to flag structural concerns. According to the Bharat Web3 Association, the current framework affects participation and liquidity within domestic markets.

During the consultation, the association asked officials to review the transaction-based TDS rate. It also raised the issue of allowing loss offsets against gains. Furthermore, representatives requested tax treatment aligned more closely with other asset classes.

Commentary referenced these points. However, officials did not indicate whether such proposals would enter the 2026 budget process. The tax discussion connects directly to broader policy objectives. 

While authorities seek oversight, industry leaders argue the current design may divert activity offshore. This concern framed the next part of the conversation around banking access.

Banking Access Emerges as Structural Constraint

Beyond taxation, banking access was also discussed. Although crypto trading remains legal in India, operational frictions persist. Several Web3 firms report ongoing difficulty securing stable banking relationships.

Companies cite delayed account approvals and sudden service withdrawals. Others point to heightened compliance checks that disrupt routine operations. According to the Bharat Web3 Association, these challenges affect payroll, vendor payments, and customer settlements.

During the consultation, representatives emphasized that limited banking access affects only compliant businesses. They argued that uncertainty discourages global firms from establishing India-based operations. As a result, domestic startups face competitive disadvantages.

The association urged clearer coordination between regulators and banks. Notably, it did not request reduced oversight. Instead, the discussion emphasized the need for clear, consistent guidance to help financial institutions avoid misinterpretation. 

The conversation then moved to a wider concern about regulatory clarity. Without clear rules, banks and companies tend to act cautiously. This uncertainty shaped the final part of the meeting.

Related: India Tightens Crypto Oversight, Leaving Retail Traders With Fewer Platforms

Regulatory Clarity Frames the Policy Signal

India still lacks clear, comprehensive crypto laws, and this continues to be a recurring problem. Although policymakers recognize digital assets, they have not clearly defined how they should be classified. This unresolved issue was a key focus during the pre-budget consultation.

The Bharat Web3 Association called for clearer distinctions between digital asset activities. Specifically, it referenced differences between trading, infrastructure development, and application-layer projects. According to participants, these distinctions matter for compliance and supervision.

Industry representatives noted that unclear definitions complicate enforcement. They also limit long-term planning for developers and investors. As a result, firms struggle to align operations with regulatory expectations.

The discussion also referenced India’s role in global digital asset coordination. Countries including the United States, the European Union, and Singapore have introduced detailed frameworks. However, officials did not outline timelines or legislative paths during the meeting.

The association presented its requests as part of a continuing conversation. It described the meeting as early input to help shape the 2026 Union Budget. Importantly, no commitments emerged from the consultation.

India’s annual budget has become a policy signal for the crypto sector. Budgets usually don’t bring full new laws, but they can change how taxes work. That’s why the industry pays close attention to talks held before the budget.

Ahead of Budget 2026, the Bharat Web3 Association again raised concerns about taxes, access to banking, and unclear rules. The meeting showed growing pressure from the industry, but no decisions were made.

The pre-budget discussion did show that policymakers are engaging in a more organized way. Topics included crypto taxes, banking hurdles, and unclear legal definitions. Still, while the talks signaled rising pressure before Budget 2026, they did not confirm any policy changes.