You can't tax every crypto trader and holders. How do you tax people trading defi on decentralized exchanges and selling on P2P using escrow. It will really be difficult. Currently, my bank doesn't know the source of my credit, it's not tied to commodity. Censoring crypto is very complex.
For now they can’t, and they will focus more on centralized platform to know every single person who are into cryprocurrency and that’s where taxation begins. Sooner or later they will require everyone to report crypto profits, this could be more good than to ban cryptocurrency at all, we will deal with this soon.
Good luck with their government if they could do that since in the first place they don't want crypto to be used a means of payment. There are many ways to avoid being in the list of centralization so I wonder how did their government plan all of this making exceptions and consideration.
The tax isn't that big and anyone who are holding won't get taxed. Once you remove yourself from being on the list of centralization especially crypto holders you are safe from taxation and also don't make it obvious if you want to trade with someone and there's no way on earth they would know someone is trading with x person.
In short, there are really ways or methods which could really make yourself able to hide with these taxation.Come to think that other government had already imposed some taxation on transactions made but still not able
to make it in full extent or effectivity yet users who had been dealing with crypto could able to avoid themselves on getting taxed without being detected which is the reason on why government do really hate up crypto
for this kind of particular feature which they cant really get rid off nor able to control.So its not really that a worrisome thing for Indian crypto users.