India’s Tax Authorities Flag Crypto Risks Amid Offshore and DeFi Boom
India's Income Tax Department has sounded alarms over cryptocurrency transactions during a parliamentary finance committee meeting. Authorities highlighted the growing use of offshore exchanges and decentralized finance (DeFi) platforms, which complicate tax enforcement through anonymous, cross-border transactions.
The Central Board of Direct Taxes (CBDT) noted that private wallets and DeFi tools enable users to bypass regulated financial systems, creating challenges for tracking taxable income. India currently imposes a 30% tax on crypto profits and a 1% tax deducted at source on transfers.
In response, the Financial Intelligence Unit has greenlit 49 crypto exchanges for regulatory compliance in fiscal year 2024-2025. The MOVE aims to curb tax evasion risks posed by unmonitored digital asset flows.
