Taxation deters Indian crypto investors amid rising interest: Mudrex

Taxation continues to be a major barrier for Indian crypto investors, even as the ecosystem shows signs of maturing, reveals a recent survey by crypto investment platform Mudrex. The government’s current tax regime, particularly the flat 30 per cent tax on gains, has emerged as a key deterrent, with investors calling for clarity, fairness, and reform.

 

The survey, titled 'What India Thinks: Crypto Regulation, Taxation & Investment Trends', gathered insights from over 9,000 participants across age groups, income levels, professions, and regions. "As many as 84 per cent of respondents believe current crypto taxes are unfair when compared to other asset classes," the survey noted.

 

 

Among those surveyed, 66 per cent cited the 30 per cent tax on gains as the biggest obstacle to crypto investing. Other concerns included the inability to offset losses (12 per cent), fraudulent activities (12 per cent), the 1 per cent TDS (7 per cent), and high exchange fees (3 per cent).

 

Despite these barriers, sentiment toward the future of crypto remains cautiously optimistic. Nearly 90 per cent of investors said they would increase their investments if government policies became clearer. Of these, 55 per cent strongly agreed, while 35 per cent said they would invest more if tax rates were reduced.  ALSO READ | 'Regulatory clarity key to India's crypto growth over the next 18 months 

The survey also indicates a shift in investor mindset. Nearly two-thirds (64 per cent) now view crypto as a long-term wealth-building tool, rather than a quick-profit opportunity. Other motivations included curiosity (14 per cent), short-term gains (12 per cent), and hedging against inflation (6 per cent). Just 4 per cent said they remain undecided.

 

India’s leadership in global crypto adoption adds urgency to the call for policy clarity. “India has led the world in crypto adoption for three consecutive years, according to industry reports. This rapid growth highlights both the immense opportunity and the pressing need for regulatory clarity,” the survey said.

 

Regulation emerged as a unifying demand across investor profiles. An overwhelming 93 per cent of respondents said they support regulation for the crypto sector. Among them, 56 per cent advocated for a comprehensive framework, 24 per cent preferred lighter oversight, and 13 per cent wanted regulations focused solely on taxation. Nearly 50 per cent also backed the creation of a dedicated crypto regulator.

 

When it comes to sources of crypto knowledge, YouTube leads the way, with 43 per cent of investors relying on it. This was followed by news media (19 per cent), friends and family (15 per cent), and social platforms like X (14 per cent).

 

On the education front, 77 per cent of respondents expressed a desire to see crypto and blockchain included in Indian college curricula. Only 12 per cent said this should wait until adoption becomes more mainstream.  ALSO READ | Crypto holds steady: BTC, ETH range-bound; investors eye US inflation data

  A significant 78 per cent believe India is late in embracing crypto and Web3, while just 12 per cent support the government’s currently cautious approach.

 

Crypto’s relevance is also becoming political. According to the survey, 67 per cent of respondents said they are very likely to vote for a political party that supports crypto. An additional 24 per cent said they are somewhat likely to do so, while only 9 per cent said crypto policy would not influence their vote.

 

India’s digital asset future hinges not only on innovation but also on clarity, according to industry leaders.

 

“India is already at the forefront of global crypto adoption and has the talent, appetite, and scale to shape the digital asset economy. But to get there, regulation must evolve into clarity,” said Edul Patel, CEO and Co-founder of Mudrex. “The survey shows that investors are not against rules; they’re against uncertainty. Clear regulation will give investors the confidence to participate. Treating digital assets on par with other asset classes will encourage more participation, prevent capital flight, and establish India as a credible hub for digital finance.”