The imposition of a 1% Tax Deducted at Source (TDS) on virtual digital assets (VDA) trading in India has seen a significant shift of three to five million crypto users to offshore trading platforms, causing the loss of Rs 3,493 crore in potential revenue for the Indian government. A report by the Esya Centre highlighted that, despite the Rs 258 crore collected, 97% came from domestic Indian VDA exchanges, with a mere 0.2% coming from trades on offshore platforms, representing a fraction of the expected revenue. The study advocates for a reduction of TDS to 0.01% or an alternate reporting method, emphasizing the current tax system’s adverse impact on users and revenue potential.