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Indian tax officials complained about the difficulty of monitoring crypto transactions, 2026/01/09 12:22:49
India’s Income Tax Department (ITD) is concerned that the anonymous nature of cryptocurrency transactions could make it difficult to monitor traders’ tax compliance.
ITD announced that crypto asset transactions through foreign exchanges, private wallets and decentralized finance (DeFi) applications interfere with the calculation of taxable income. Representatives of ITD admitted: the anonymity of cryptocurrencies and the ability to instantly transfer abroad, bypassing regulated financial intermediaries, makes it difficult to track suspicious transactions.
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A large number of digital asset transactions are conducted on foreign exchanges or decentralized platforms that are not registered with Indian regulators, the department said. Considering that different jurisdictions are involved in transactions, it is almost impossible to identify the owners of crypto assets, despite the desire of tax authorities of different countries to exchange information, tax officials are unhappy.
Currently, India has high taxes for crypto traders. Traders pay a flat 30% tax on all profits from digital assets, as well as a 1% transaction withholding tax (TDS) that applies to all trades, regardless of profitability.
Despite high taxes, major crypto exchanges are keen to enter the Indian market. In December, US-based Coinbase resumed registering Indian users after a two-year hiatus. Earlier, the Kraken exchange also expressed its readiness to obtain a license and return to India.
