India Eyes PAN Linking for Crypto Accounts as FIU Flags P2P Transfers, Ponzi Schemes, and Offshore Platforms
The Indian government is worried about its high risk crypto system, raising concern over illegal activities and weak tax reporting. Top officials shared this update with a Parliamentary panel and explained the growing risks in the virtual digital asset sector.
Government reports show that crypto transactions link to serious crimes. These include drug trafficking, human trafficking, and smuggling. Officials also flagged risks like terror funding and online fraud. The use of VPNs and fake platforms has made tracking harder for agencies.
Illegal Crypto Activities Under Watch
The FIU India has increased monitoring under stronger VDA regulation India. Reports from the agency have gone up in recent years. These reports show common illegal patterns such as peer to peer transfers, Ponzi schemes, and fake exchanges. Many of these activities involve offshore platforms that avoid Indian rules.
Authorities have taken strict action against such entities. Several cases have been filed under anti money laundering laws. Some global exchanges have paid penalties after failing to follow rules. Agencies have also blocked many websites that did not meet compliance standards.
Crypto Tax Reporting Gap Raises Concern
A major issue remains crypto tax compliance. Data shows a large gap between people trading crypto and those reporting income. Around Rs. 6.45 lakh users faced TDS on crypto deals. But only about Rs. 1.39 lakh reported this income in tax returns. This gap shows clear under reporting in the high risk crypto system.
At the same time, tax collection from crypto has increased. This rise shows that more people are using digital assets. However, officials believe better reporting is needed to avoid misuse and protect the system.
New rules aim to improve control. Reporting of crypto transactions is now mandatory under updated tax laws. Officials have also suggested linking crypto accounts with PAN. This step can help track ownership and reduce hidden transactions. Plans for common valuation rules may also bring more clarity.
India Focuses on Stronger Crypto Regulation
The Parliamentary panel noted that large investments continue to flow into crypto. Many funds move outside India, which makes tracking harder. This trend puts pressure on regulators to act faster and more strongly.
India is not planning a complete ban. Instead, the focus remains on strict monitoring of the high-risk crypto system. The government aims to improve transparency, curb illegal activity, and enhance tax collection in the growing crypto market.
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