“Taxed as legal, regulated as illegal”: Raghav Chadha urges Govt to legalise crypto, says it can generate ₹15,000–20,000 Cr annually

Rajya Sabha MP Raghav Chadha has urged the government to legalise virtual digital assets (VDAs) in India, reasoning that it could potentially generate ₹15,000–20,000 crore in additional annual tax revenue.

Raghav Chadha urges govt to legalise VDAs in India

During the Budget debate in the Rajya Sabha, the AAP MP, known for raising issues on economic policy, taxation, and consumer protection, urged India to recognise VDAs, including cryptocurrencies, stablecoins, and tokenised real-world assets, as a legitimate asset class instead of letting the ecosystem drift offshore.

“Cryptocurrencies and other virtual digital assets are taxed in India as if they are legal—at a flat 30% income tax and transaction levies—but regulated as if they are illegal,” he said.

He remarked that not prohibition but regulation is protection. 30% flat tax on capital gains from VDAs has been applicable in India since April 1, 2022, while the 1% tax deducted at source (TDS) on every trade became effective on July 1, 2022.

Notably, the Union Budget 2026 proposed additional penalties for non-furnishing or inaccurate reporting of crypto-asset transactions.

Under the proposal, a penalty of ₹200 per day will be levied for delays in filing statements, while a flat ₹50,000 fine will apply in cases of inaccurate reporting or failure to correct errors. The provisions will come into effect from April 1, 2026.

Despite this heavy taxation, the VDA sector continues to operate without formal legal recognition, a dedicated licensing regime, or a comprehensive investor protection framework.

Although the Financial Intelligence Unit (FIU-IND) has introduced AML and CFT guidelines for VDA entities, the lack of a clearly defined regulatory framework has kept the industry in uncertainty.

Raghav Chadha also said that nearly 12 crore Indians are investing through overseas platforms, with an estimated ₹4.8 lakh crore in VDA transactions moving offshore.

He further said that 73% of India’s crypto trading volume now takes place on foreign exchanges, and nearly 180 Indian crypto startups have shifted to jurisdictions like Dubai and Singapore in pursuit of regulatory clarity.

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