India must revise tax policy
“The current regulatory framework disproportionately affects compliant users and entities while failing to address the root causes of non-compliance,” the report added, pointing out that registering with the FIU does not mandate offshore exchanges to set up local subsidiaries or ensure tax compliance.
To address these challenges, the report recommended revising Section 194S of the Income Tax Act to make offshore platforms responsible for TDS deductions, even if they’re not physically based in India, while also lowering the 1% TDS rate to 0.01%.