India Reevaluates Crypto Framework: Taxes, Regulations Under Scrutiny

India is stepping back to analyze its crypto tax framework as it grapples with regulations and clarity concerns. The Central Board of Direct Taxes (CBDT) is reviewing the current system for Virtual Digital Assets (VDAs), including the 1% TDS on sales exceeding ₹10,000 annually, raising questions about existing rules’ impact. Many platforms have relocated to other countries like Dubai due to India’s strict tax regime. The government has sought explanations from crypto exchanges about how these regulations have hindered them, particularly regarding taxes, unclear regulations, and liquidity issues.