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India's Crypto Trading Dominated by Offshore Exchanges
A new report from the TIOL Knowledge Foundation reveals that offshore crypto exchanges accounted for approximately 95% of India's VDA trading volume in the fiscal year 2025-26. The report attributes this shift to India's crypto tax regulations, which include a 1% TDS on applicable VDA transactions and a 30% tax on crypto profits. The Indian government's previous move to block 25 offshore crypto platforms did not bring back traders to domestic platforms. Instead, traders continued to trade on other offshore platforms. The report suggests reducing the TDS to 0.01% and allowing traders to offset crypto losses against gains to make Indian crypto exchanges more attractive. The current trend could lead to an offshore crypto trading volume of ₹15.27 lakh crore by FY 2030-31, generating about ₹1,80,814 crore in cumulative capital gains tax over five years. However, the report warns that this could result in significant tax losses for the government if the existing crypto tax rules are not restructured.