Crypto Tax Rules in India Trigger Mass Notices to Traders

India's cryptocurrency landscape remains fraught with regulatory tension. A 30% tax on crypto gains, non-offsettable losses, and a 1% TDS on transactions have created a challenging environment for traders. Despite these hurdles, the absence of an outright ban leaves the sector in a paradoxical state—neither fully embraced nor rejected.

The industry is split on how to navigate this ambiguity. Raj Kapoor of the India Blockchain Alliance argues that stringent rules provide clarity, while exchanges push for reforms. Key demands include slashing TDS to 0.01% and permitting loss offsets—a MOVE that could revive trading volumes stifled by the current regime.

Tax authorities are taking no chances. Notices have been dispatched to thousands of traders who allegedly underreported crypto activity in recent fiscal years. The crackdown reflects growing concerns over tax evasion and illicit flows, with regulators scrutinizing transactions that once flew under the radar.