India’s Tax Officials Warn Crypto Threatens Tax Collection System
Indian tax authorities have raised alarms about cryptocurrency's disruptive potential for fiscal oversight. During a parliamentary briefing on January 7, 2026, officials highlighted how blockchain's pseudonymous nature enables cross-border value transfers that evade traditional monitoring frameworks.
The interagency presentation—featuring India's Income Tax Department, Financial Intelligence Unit, and Department of Revenue—identified offshore exchanges and non-custodial wallets as critical pain points. When transactions occur through foreign platforms beyond jurisdictional reach or via self-hosted wallets, tax enforcement becomes functionally impossible.
Decentralized finance protocols compound these challenges by eliminating intermediaries entirely. Without centralized entities to subpoena, authorities struggle to establish ownership trails or calculate tax liabilities. The parliamentary committee reviewed these findings in a dedicated report on VIRTUAL digital assets, signaling heightened regulatory scrutiny ahead.
