India's Crypto Sector Classified as 'High Risk' Amid Regulatory Scrutiny

Regulators in India are intensifying their scrutiny of the country's crypto sector after it was classified as 'high risk' by a parliamentary committee on finance.

The classification comes amid growing concerns about money laundering, cyber fraud, and other illicit activities linked to cryptocurrencies. According to officials, nearly 6.45 lakh individuals were subjected to tax deductions (TDS) on crypto transactions during the last fiscal year, but only around 1.39 lakh users actually disclosed their crypto-related income while filing tax returns.

Despite India already imposing a 30% tax on crypto gains and a 1% TDS rule since 2022, trading activity remains strong, with thousands of crores continuing to flow into digital assets.