India's 2026 budget represents a critical juncture for the country's crypto regulatory landscape. Rather than seeking special treatment, the industry is pressing for something more fundamental: transparent rules and proportionate taxation structures.

The current system creates significant friction points. A 30% capital gains tax sits on top of a 1% transaction-level tax deduction (TDS), creating a double taxation effect that dampens trading activity and market liquidity. Add to that the prohibition on offsetting losses against gains, and you've got a framework that penalizes participation in volatile markets.

For India's crypto ecosystem to mature, policymakers need to recognize this isn't about favoritism—it's about designing rational incentive structures that encourage market participation rather than suppress it. Without clarity and proportionality, both retail and institutional players will route capital elsewhere.