India's Parliamentary Standing Committee on Finance held a high-stakes hearing in New Delhi today, summoning executives from Binance, WazirX, and ZebPay. The closed-door session aims to chart a regulatory path for virtual digital assets—a market where harsh rules like a 1% TDS and a flat 30% tax on gains have already driven massive trading volumes offshore.
Three-Part Meeting: From Exchanges to Ministries
According to an official Lok Sabha notice dated May 13, the proceedings began at 11:00 AM IST in Committee Room D at Parliament House Annexe. BJP MP Bhartruhari Mahtab, who chairs the panel, led the first session with representatives from Binance, WazirX, and ZebPay. The International Financial Services Centres Authority (IFSCA) joined from 12:30 PM to 1:30 PM, followed by officials from the Ministry of Finance and the Ministry of Corporate Affairs from 2:00 PM onwards.
The committee had previously held similar consultations with domestic platforms CoinDCX and CoinSwitch. This systematic approach—first local, then global—signals the government's intent to gather broad feedback before drafting policy.
A Bumpy History With Digital Assets
India's relationship with crypto has swung wildly. The RBI issued its first warning in 2013, then banned banks from servicing crypto firms in April 2018. The Supreme Court struck down that ban on March 4, 2020, reviving the industry. Since then, policy has shifted toward heavy taxation and anti-money laundering (AML) rules.
In 2022, India imposed a 30% flat tax on crypto profits and a 1% TDS on every transaction. In March 2023, it brought service providers under the Prevention of Money Laundering Act, forcing exchanges to register with the Financial Intelligence Unit (FIU-IND). The result? Trading volumes on Indian exchanges have dropped an estimated 70% over two years, while offshore platforms captured the exodus.
Industry Hopes for 'Crypto Tax 2.0'
The hearing has sparked intense chatter across the Web3 India community. Many traders view this official engagement as a step toward long-term legitimacy. Some, however, question WazirX's inclusion due to past operational incidents.
Investors are pushing for a fairer system, informally dubbed 'India Crypto Tax 2.0,' which would lower the TDS, restructure capital gains rules, and provide clear compliance guidelines. A supportive framework could protect local investors and lure tech innovation back to the country.
The government appears to have shelved its earlier inclination toward an outright ban. This parliamentary committee hearing signals a shift toward a compliance-heavy market—one that aims to curb financial crime without killing the underlying technology.