Does India Need a New Digital Asset Law?

Updated

August 19, 2025

Gambar Does India Need a New Digital Asset Law?

Jakarta, Pintu News – India’s highest tax authority, the Central Board of Direct Taxes (CBDT), is conducting intensive consultations with crypto exchanges and industry players to assess the need for a new digital assets law.

According to a report from the Economic Times, CBDT has sought the opinion of crypto players on whether India needs a new law for Virtual Digital Assets (VDA).

If a new law is required, CBDT also wants to know which regulator should oversee it, with options including SEBI, RBI, MeitY, or FIU-IND.

Check out the full information in this article!

Crypto Tax Policy in India

Currently, profits from crypto are taxed at 30% with no possibility of loss deduction, coupled with a Transaction Tax (TDS) of 1% on each transaction. Industry players claim that this policy has reduced liquidity and pushed trading volumes overseas.

According to Crypto Times, the Indian government admits that it does not currently have a real-time system to track revenue from crypto transactions, despite collecting more than $700 million in taxes over two years. CBDT is currently reviewing whether the 1% TDS rate is too high and what the ideal rate should be.

In addition, the institute is also considering whether different TDS norms should be applied for retail traders, institutions, and market makers. The survey also addresses operational issues, such as checking the domicile of counterparties, properly assessing VDAs, and managing inter-personal transactions.

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Global Regulations and Frameworks

telegram investigated in india — The image created by AI

CBDT also asked whether crypto exchanges in India are ready to comply with the OECD’s global crypto reporting framework (CARF), which is designed to prevent cross-border tax evasion.

Some exchanges in India have started offering futures and options trading, where TDS is lower, but there is still no legal clarity on derivatives, offshore transactions, or even an exact definition of “VDA”.

According to Purushottam Anand, founder of crypto law firm Crypto Legal, India is likely to issue a complete VDA regulation.

Anand also stated that the government is conducting a thorough examination of the VDA this year, based on global issues such as G20 documents and recent legislative studies. Anand emphasized that India feels that rules or restrictions will be most effective if implemented with strong international cooperation.

Expert Views and Future Prospects

This consultation may be the first step towards comprehensive VDA legislation. According to legal experts, the current global consensus tends towards regulation rather than prohibition.

With developed markets recognizing crypto as a legitimate asset class, there is hope that India can ease taxes and set clearer rules to retain traders.

Conclusion

This latest initiative by CBDT indicates a possible change in the Indian government’s approach to crypto regulation and taxation. Taking into account inputs from various stakeholders, India seeks to create a more conducive environment for growth and innovation in the digital asset industry.

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