India Flags Crypto Risks For Tax Enforcement
Indian tax authorities warned that cryptocurrency transactions pose significant risks to tax enforcement due to their borderless and anonymous nature.Summary
India's Income Tax Department (ITD), under the Central Board of Direct Taxes (CBDT), informed a parliamentary standing committee about major risks cryptocurrencies pose to tax enforcement. Officials cited challenges from offshore exchanges, private wallets, and DeFi tools, noting that anonymous, borderless, and near-instant value transfers bypass regulated intermediaries. The ITD stressed that jurisdictional complexities in tracking offshore Virtual Digital Asset (VDA) activity make identifying holders for tax assessment "virtually impossible," despite recent information-sharing efforts. India currently imposes a flat 30% tax on crypto gains and a 1% Tax Deducted at Source (TDS) on all transfers, but local industry figures note the framework creates friction because losses are not recognized.
(Source：Cointelegraph)