India's ITD Warns of Cryptocurrency Transaction Risks, Complicating Tax Enforcement
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 08 2026- Tax Risk Warning: During a parliamentary finance committee meeting, India's Income Tax Department (ITD) highlighted that the anonymity and cross-border nature of cryptocurrency transactions make tax tracking virtually impossible, significantly complicating compliance efforts.
- Current Tax Policy: India imposes a flat 30% tax on all profits from crypto assets, along with a 1% tax deducted at source on all transfers, yet the government's overall stance on cryptocurrency remains cautious despite allowing trading under this heavy tax regime.
- Regulatory Challenges: The ITD emphasized that the use of offshore exchanges and decentralized finance tools complicates the identification of taxable income, creating obstacles for tax officials in assessing and reconstructing transaction chains.
- Industry Development Dynamics: While India's crypto ecosystem is rapidly evolving, with the FIU approving 49 crypto exchanges in fiscal year 2024-2025, the current tax framework fails to recognize losses on crypto transactions, leading to friction rather than fairness for market participants.
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.
