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MUMBAI – India’s fast-growing crypto futures market is gaining traction as investors seek more tax-efficient instruments and sophisticated trading strategies amid rising digital asset adoption.
Avinash Shekhar, co-founder and CEO of Pi42, one of India’s first crypto futures exchanges, says the evolution of derivatives trading in India reflects a shift toward regulatory clarity and institutional interest. Speaking with The Economic Times, Shekhar emphasized that crypto futures offer Indian investors two key advantages: lower tax liabilities and capital efficiency through leverage.
Under India’s current tax regime, spot crypto trades are subject to a 30% flat tax on gains, without the benefit of loss offsets. However, derivatives—including futures—are taxed under business income provisions, which allow set-offs and deductions. This creates a significant incentive for serious traders to move into the futures segment.
“In the spot market, even if you lose money, you’re still taxed. But with futures treated as business income, the entire tax equation changes—it’s far more efficient,” Shekhar noted.
Futures also provide capital efficiency by allowing traders to enter larger positions using margin, a feature increasingly attractive to sophisticated market participants.
Pi42, backed by crypto unicorn CoinDCX, has seen rising institutional and retail interest since launching in 2024. The exchange offers rupee-settled futures contracts on major tokens like Bitcoin and Ethereum, all without the complexities of managing crypto wallets or dealing with foreign exchanges.
As crypto markets in India mature, platforms like Pi42 are aiming to bridge regulatory compliance with innovation, providing an onshore, rupee-based trading ecosystem. With the government yet to roll out a comprehensive crypto bill, clarity around derivatives taxation could encourage broader participation in India’s Web3 economy.
“The demand is real. What we’re seeing is a more mature, tax-conscious investor entering the crypto space—not just speculators,” Shekhar said.
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