India Tax Authorities Warn Crypto Transactions Strain Enforcement Systems
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 08 2026- Enforcement Challenges: Indian tax authorities warn that cryptocurrency transactions are straining existing enforcement capabilities, particularly as offshore exchanges and private wallets limit tax transparency, complicating income tracking.
- Tax Structure Issues: India currently imposes a flat 30% tax on crypto gains and a 1% tax deducted at source on every transfer, but this framework does not allow losses to offset gains, which market participants argue discourages compliance.
- Cross-Border Transaction Complexity: Crypto transactions often span multiple jurisdictions, making asset tracing and ownership identification extremely complex, while limited international information sharing further slows transaction reconstruction, undermining accurate income assessments.
- Market Participation and Compliance Costs: Although India permits crypto trading and has approved 49 exchanges, high compliance costs remain a significant challenge for industry participants, with leaders calling for a fairer tax structure to promote market growth.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
