MUMBAI/DELHI: As the Union Budget 2026 approaches, the Bharat Web3 Association (BWA) has formally pushed for tax rationalization for Virtual Digital Assets (VDAs). This marks the fourth year since the stringent tax framework was implemented.
Key Proposals for Budget 2026:
- TDS Revision: The industry seeks a reduction in Tax Deducted at Source (TDS) from the current 1% to 0.01%. They argue the current rate has dried up liquidity.
- Set-off on Losses: A key demand is the provision to set off losses incurred in one VDA against gains in another, a facility currently denied under Section 115BBH.
- Threshold Increase: Increasing the TDS deduction threshold from ₹10,000/₹50,000 to ₹5 lakh to protect small retail investors.
The Data: Since the 2022 tax imposition, Indian exchanges have seen a trading volume drop of over 80%. Ironically, this has not stopped trading but shifted it to offshore platforms that do not comply with Indian tax laws, defeating the government’s purpose of tracking transactions.
