Budget 2025 by Nirmala Sithraman made a lot of Indians very happy individuals,and has indeed transformed her image from an evil money grabbing politician to a benevolent angel overnight.However, not everyone is celebrating—crypto traders are far from pleased.

Despite continuous pleas for a fairer approach, the Indian government has refused to lower its steep 30% tax on cryptocurrency gains. Instead, it has imposed even stricter reporting requirements and harsher penalties for non-compliance, further tightening the grip on the industry.

This move is seemingly part of greater doctrine that aims at limiting crypto adoption rather than regulating it. Ironically, India remains the world leader in cryptocurrency adoption.

The new tax policy, which will take effect on February 1, 2025, formally recognizes cryptocurrencies as "virtual digital assets"—but at a hefty price. The government has introduced a penalty of up to 70% for undeclared crypto gains, applying retroactively to holdings from the last 48 months. This leaves Indian crypto holders in a tough spot:

● Reporting holdings will incur a 30% tax plus 1% TDS (tax deducted at source) on every transaction.

● Trying to avoid tax by using decentralized exchanges or foreign platforms could lead to severe penalties if detected.

Starting in April 2026, businesses dealing in crypto will be required to report all transactions to tax authorities, with just 30 days to correct any discrepancies. Crypto exchanges and other reporting entities must also provide detailed information, including:

● The identity of users involved in transactions.

● The type and value of crypto assets involved.

● The date, time, and fiat value of each transaction.

This increased oversight may push more users toward privacy-focused solutions or offshore platforms, as they seek to avoid the growing scrutiny.

Edul Patel, CEO and Co-founder of Mudrex, commented-"While regulatory clarity remains, the lack of revisions—particularly on the 1% TDS and the inability to offset losses—continues to pose challenges for investors, traders, and the industry.

One twitter user expressed frustration: “It is total evil to tax a 30% capital gain. It should be way less. It will stifle innovation. I believe crypto will find a way to be used outside of this corrupt system.#Bitcoin will bring freedom to India.

” Another questioned,“Will I have to pay ₹30 to the government in my earning in crypto of Rs 100 ??🤔”

Others voiced their anger at the government's stance:“Look at the arrogance of this woman. She most certainly doesn't think about young investors who are still new to crypto. It's very unfair to impose such tax to all of us be it a whale or a mere investors like me”

As the government's crackdown on crypto intensifies, India's once-dominant position in the market is at risk. Will they relent, or will their heavy-handed approach drive crypto innovation abroad, forever altering the country's digital future?