Why Indian Traders Are Choosing Crypto Futures Over Spot Deals

In India’s rapidly evolving crypto market, a clear trend has emerged — crypto futures trading is surpassing spot deals. With the lure of higher profits, lower tax implications, and ease of INR-based margins, traders are increasingly shifting toward derivatives of virtual digital assets (VDAs).

Source: Chatgpt

Why Futures Are Winning Over Spot Trades Unlike spot transactions that require full upfront payment, futures allow traders to leverage 10x to 50x of their margin money, sometimes even higher compared to stock futures. Globally, leverage can go up to 100x. This ability to bet big with smaller capital is attracting a new wave of retail and professional traders in India.

In fact, industry insiders estimate that futures trading volumes on leading Indian exchanges are at least three times higher than spot trading volumes, a sharp surge driven by both bullish sentiment and tax benefits.

The Tax Advantage Driving Futures

Spot crypto trades in India attract a 1% Tax Deducted at Source (TDS) on every sale, regardless of profit or loss. In contrast, crypto futures are exempt from TDS since no actual transfer of VDAs takes place — only contracts are traded.

Additionally, while spot profits are taxed at a flat 30% under Section 115BBH, gains from futures are classified as "income from other sources" and taxed according to an individual’s income slab. Traders often take advantage of this by using accounts of family members in lower tax brackets, significantly reducing their tax burden.

How INR Margins Boost Adoption

Indian exchanges have simplified access by allowing margins in Indian rupees (INR). The INR is then converted into stablecoins like USDT and used on global platforms such as Binance to execute futures trades. This seamless process has made it easier for domestic traders to participate without dealing directly with stablecoin wallets.

Market Growth and Discreet Expansion

Although local exchanges do not disclose official volumes, insiders suggest daily trade sizes range between $3–5 million per exchange. Recently, some platforms have even begun advertising crypto futures on social media and OTT platforms, signaling growing mainstream interest despite the lack of formal regulation.

Regulatory Spotlight

The Central Board of Direct Taxes (CBDT) has started examining how crypto derivatives, cross-border VDA trades, and definitions of VDAs fit within India’s tax and regulatory framework. This suggests that while futures currently enjoy tax advantages, regulatory clarity may soon reshape the landscape.

The Bigger Picture

For now, Indian crypto traders view futures as a smarter, more profitable alternative to spot trading, thanks to leverage opportunities, lower tax exposure, and INR-based margins. However, with regulators watching closely, the sustainability of this advantage remains uncertain. A2ZCrypto is a fast-growing crypto OTC exchange. We help retail, corporate, and institutional clients buy and sell large amounts of USDT (crypto to fiat & vice versa).

Note: We do not allow P2P traders or gambling-related funds. We assure 100% secure and seamless transactions with full compliance support. Article Source: TOI