Cryptocurrencies pose serious tax enforcement challenges, warns Income Tax Dept
The Income Tax Department has told Parliament that cryptocurrencies and other virtual digital assets (VDAs) are making it tough to track money and collect taxes.
Because crypto is anonymous, works across borders, and moves super fast, it's easy for people to dodge oversight and skip regulated channels.
Why should you care?
With so many offshore exchanges and private wallets out there, figuring out who actually owns what—and how much tax they owe—is a real headache for authorities.
The RBI also isn't a fan, warning that crypto can be risky for investors and could even help with money laundering or terror financing if left unchecked.
That's why the government now taxes crypto gains at 30%, takes 1% TDS on transfers, and requires service providers to register—hoping these rules will keep things fair (and legal) for everyone.