India Finds Most Crypto Traders Skip Tax Filings: Report
India's tax authority found fewer than 25% of 645,000 crypto traders reported transactions. The compliance gap signals growing enforcement pressure.
India's tax enforcement officials have uncovered a stark compliance failure: fewer than one in four of the 645,000 people who conducted cryptocurrency transactions actually reported those activities on their tax returns, according to a new report cited by Cointelegraph.
The finding reveals a massive disconnect between the scale of retail crypto trading activity in India and the government's ability to collect taxes on it. With hundreds of thousands of traders apparently sitting outside the tax net, authorities now face pressure to pursue unreported gains on a significant scale.
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India introduced a strict crypto tax framework in 2022, imposing a flat 30% levy on digital asset gains alongside a 1% tax deducted at source on transactions. Despite those measures being designed partly to create an audit trail, the new data suggests enforcement has not kept pace with participation in crypto markets.
The gap between trading volumes and tax filings is likely to intensify regulatory scrutiny of both individual investors and domestic crypto exchanges, which are required to report transaction data to the government. Analysts note that as India's tax department cross-references exchange data with filed returns, the number of compliance notices sent to traders could rise sharply in the months ahead.
The report underscores a challenge that tax authorities in multiple countries face as crypto adoption outpaces regulatory infrastructure — though the sheer size of India's non-compliant population makes the shortfall particularly striking. Continue reading at Cointelegraph.
