India Budget 2026: Crypto Traders Face Tax Burden Despite Losses

As India's Union Budget 2026 looms, the crypto tax regime faces scrutiny after revealing nearly half of investors closed FY25 in the red—yet still paid taxes. KoinX's report, *India’s Crypto Tax Story 2025*, exposes a stark divergence between trading outcomes and tax liabilities. Of 700,000 anonymized users, 50.91% reported net gains while 49.09% absorbed losses. The rub? Loss-making traders paid taxes on ₹180 crore of gains, as current rules forbid offsetting crypto losses against profits—a departure from traditional asset class treatment.

The 1% TDS on transactions, while boosting compliance, has drawn criticism for locking up capital. Market participants now watch for Budget adjustments to align crypto taxation with equitable principles. The data underscores a systemic friction: even in a bear market, the tax machinery grinds onward.