Financial authorities in India are concerned about cryptocurrency transactions complicating tax enforcement. The Income Tax Department highlighted risks during a parliamentary committee meeting involving various agencies. Challenges include offshore exchanges, private wallets, and DeFi tools, making it difficult to detect taxable income. Multiple jurisdictions further complicate tax enforcement.

India imposes a flat 30% tax on crypto profits with a 1% TDS on all transfers. While crypto trading is allowed, the government remains cautious. The country’s crypto ecosystem is growing, with 49 exchanges approved in the fiscal year 2024-2025. However, the current tax framework poses challenges as losses are not recognized, creating friction.

Efforts on information sharing remain difficult, hindering tax officials from assessing transaction chains properly. India’s stance towards crypto remains mixed, with efforts to prioritize CBDCs over stablecoins. The country’s tax regime and challenges in recognizing losses on crypto transactions are areas of concern for the industry.

Read more at Cointelegraph: India Flags Crypto Risks For Tax Enforcement