Aam Aadmi Party MP Raghav Chadha Urges Government To Legalise And Regulate Virtual Digital Assets

Aam Aadmi Party MP Raghav Chadha Urges Government To Legalise And Regulate Virtual Digital Assets

New Delhi: Aam Aadmi Party MP Raghav Chadha on Tuesday called on the Centre to grant legal recognition to Virtual Digital Assets (VDAs), including cryptocurrencies, stablecoins and tokenised assets, arguing that India’s current framework taxes them heavily while denying them regulatory clarity.

Participating in the debate on the Union Budget in the Rajya Sabha, Chadha said India treats cryptocurrencies as legal for taxation purposes but regulates them “as if they are illegal”.

“Legalise Virtual Digital Assets in India. Don’t drive them offshore. Ring-fence this ecosystem and strengthen the Anti-Money Laundering law,” he said.

India currently imposes a 30 per cent capital gains tax on income from cryptocurrency transactions, along with a 1 per cent Tax Deducted at Source (TDS) under Section 194S of the Income-tax Act, introduced through the Finance Act, 2022. Despite this, Chadha noted, VDAs have not been granted the status of an asset class.

“India taxes cryptocurrency at 30 per cent capital gains tax plus 1 per cent TDS, yet offers no legal recognition, no investor protection and no dedicated AML framework,” he said.

‘Vande Mataram’ To Be Played Before National Anthem At Government Events, Schools: Centre

Trade Moving Offshore

Citing data shared in Parliament, Chadha said Rs 705 crore in taxes was collected from VDA transactions during FY 2023 and FY 2024. However, he argued that the absence of a clear regulatory regime has pushed trading activity abroad.

“Virtual Digital Assets have not been given the status of an asset class. There is no dedicated licensing law, no clear consumer or investor protection framework, no AML guidelines and no explicit legal classification,” he said.

According to Chadha, nearly Rs 4.8 lakh crore worth of crypto trade has shifted offshore. He claimed that 73 per cent of India’s crypto trading volume in FY 2025 is now routed through overseas exchanges in jurisdictions such as Dubai, Singapore and Malaysia.

He further stated that around 180 Indian VDA startups have relocated abroad due to regulatory uncertainty.

“As a result, 12 crore Indians who want to invest in crypto, stablecoins and real-world assets are investing offshore,” he said.

Call For Regulation, Not Prohibition

Chadha argued that bringing the ecosystem onshore through strong regulation and compliance mechanisms could significantly boost government revenues.

“If we regulate it properly and bring it within India’s framework, an additional Rs 15,000 to 20,000 crore could flow into the government treasury through taxes,” he said.

Emphasising the need to balance innovation with oversight, the AAP MP concluded: “Let us not fear innovation; let us regulate it. Prohibition is not protection — regulation is protection.”