Why Smart Money is Abandoning Spot Crypto for Futures in 2026
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India's 1% TDS on crypto transfers, effective with the Income-tax Act from April 1, 2026, is constraining capital for spot traders and pushing activity into leveraged futures, which now account for over 80% of domestic trading volume. This shift raises market and liquidation risk and may hurt spot adoption and CEX liquidity, while taxpayers must use Schedule VDA and Form 26AS and follow reporting rules for AY2026-27 (FY2025-26) to claim excess TDS refunds.
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- India crypto tax 2026 pushes spot traders toward futures as 1% TDS limits their capital.
- Crypto futures drive over 80% of domestic volume, but leverage could deepen trader losses.
- Schedule VDA and Form 26AS help report gains and support excess TDS refund claims online.
India’s crypto market is moving toward futures as the 1% TDS limits capital available for spot trading. Reports indicate that derivatives now account for 80% or more of trading volume on domestic platforms. Investors also face specific rules for taxable gains, loss set-offs, TDS credits, and income-tax reporting.
The Income-tax Act, 2025 took effect on April 1, 2026. However, returns for Assessment Year 2026-27 cover income earned during Financial Year 2025-26. Those returns remain governed by the Income-tax Act, 1961.
How India Crypto Tax 2026 Works
Income from transferring a virtual digital…
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