Core Insights - India's tax authorities are facing challenges in enforcing tax compliance due to the rising adoption of cryptocurrencies, complicating tax enforcement rather than enhancing transparency [1][3] - The Indian crypto trading market is experiencing restrained activity due to ongoing tax and regulatory pressures, reflecting a global trend towards increased oversight [2][6] Tax Enforcement Challenges - The Income Tax Department highlighted the difficulties in monitoring crypto transactions during a parliamentary finance discussion, citing private wallets, offshore exchanges, and decentralized finance platforms as areas with limited visibility for traditional reporting mechanisms [3][4] - Crypto transfers often bypass traditional banking systems, making them harder to trace, akin to cash transactions, which complicates tax collection efforts [4][5] Tax Structure and Impact - India imposes a flat 30% tax on crypto profits, with an additional 1% Tax Deducted at Source (TDS) on every trade, regardless of profit or loss, which discourages frequent trading [5] - Authorities have identified over ₹888 crore ($98.5 million) in unreported income through enforcement actions, having sent over 44,000 notices to taxpayers [5] Regulatory Environment - Despite the stringent tax framework, India has not implemented a blanket ban on crypto trading, allowing regulated platforms to operate and international exchanges to comply with local regulations [6] - Actions have been taken against offshore platforms that do not meet compliance standards, indicating a focus on regulatory enforcement rather than outright prohibition [6]

Transfer Pricing Tax Enforcement - CFOs need to navigate stricter transfer pricing tax enforcement [1] - The article discusses how CFOs can navigate stricter transfer pricing tax enforcement [1]

Regulatory Enforcement - India is increasing crypto tax enforcement [1] - International data sharing is being utilized [1] - AI is being leveraged for crypto tax enforcement [1]