With the 30% flat tax and no loss offset on spot crypto, is anyone actually still holding spot or has everyone just moved to derivatives or offshore at this point?

The 30% flat tax with zero loss offset is genuinely brutal for active traders. You make 5L profit on one trade, lose 4L on another, you still pay 1.5L tax on that 5L gain. Net profit 1L but tax paid 1.5L. Math doesn't math.

What I've seen in my circle is a clear split. The passive BTC holders who bought years ago are just sitting tight, not selling. But anyone trading actively has either moved to derivatives or gone offshore before FIU started cracking down.

The derivatives angle is interesting though. Under Section 43(5) crypto derivatives are taxed as speculative business at slab rates, not the flat 30%. So if your total income is under 12L, the 87A rebate means effectively zero tax. You can also deduct trading expenses and carry forward losses for 4 years. Complete opposite of spot treatment.

I know Grade Capital runs a crypto derivatives fund out of Gurugram which makes sense given this tax structure. They're not touching spot for this exact reason.

Offshore got harder after December 2023 when FIU blocked Binance and 8 other exchanges. Their combined India share dropped from 60% to 30% by mid 2024. Binance came back after registering but others are still blocked.

Derivatives just make more sense tax wise if you're actively trading. Spot only works if you're holding multi year.