India’s Crypto Tax Crackdown Sparks Industry Backlash

Indian tax authorities have issued mass notices to cryptocurrency traders amid a contentious regulatory environment. The government maintains a 30% capital gains tax and 1% transaction levy while refusing to allow loss offsets—a policy framework that has drawn sharp criticism from local exchanges.

Industry leaders are pushing for reduced TDS rates and loss deduction provisions, arguing current rules stifle growth. Raj Kapoor of India Blockchain Alliance defends the clarity of strict regulations, but market participants warn the approach risks driving activity underground.

The Income Tax Department's enforcement campaign targets unreported transactions from FY2022-24, with CoinDCX's Sumit Gupta urging users to declare all crypto income including airdrops and offshore exchange activity. This crackdown reflects growing institutional scrutiny as digital assets gain mainstream traction.