After overturning a 2018 shadow ban, India levied a 30% capital gains tax on cryptocurrency transactions, which does not allow users to offset losses against gains, while also subjecting domestic crypto trades to a 1% Tax Deducted at Source.
Additionally, the government has attempted to regulate the sector by bringing VDAs under the Prevention of Money Laundering Act (PMLA) and blocking URLs of non-compliant offshore exchanges to curb tax evasion and improve oversight.
However, the report highlights that these measures have been largely ineffective, as traders continue to bypass restrictions using VPNs, and offshore platforms still dominate trading volumes.