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The Indian government is facing a significant loss of revenue due to its taxation policy on cryptocurrencies. A recent study by the Esya Centre suggests that the government should consider reducing the transaction tax deducted at the source (TDS) from 1% to 0.01%. This adjustment is recommended to align with the government’s objectives of increasing revenue and enhancing transparency. The TDS has led to approximately five million crypto traders moving their transactions offshore, resulting in a potential revenue loss of $420 million for the government. The study also reveals that Indians redirected over $3.8 billion in trading volume from local to international crypto exchanges following the announcement of the controversial rules. The implementation of TDS has caused a surge in web traffic, active users, and downloads on offshore platforms, while Indian VDA exchanges have experienced a decline. The study estimates that over 90% of total VDAs traded by Indians are on offshore platforms, indicating a strong inclination for relief from the 1% TDS. In addition to reducing the TDS, the study recommends providing clarity on the scope of TDS on offshore platforms and empowering a government entity to blacklist non-compliant platforms. The recommendation aligns with the increasing calls from various players in the crypto space in India to reduce the tax burden on crypto transactions. Indian crypto exchanges have been taking measures to ensure their financial viability amidst the crypto drawdown, including trimming expenses and exploring alternative revenue streams. While discussions on a regulatory framework are ongoing, the topic of taxation appears to be deferred.