It's the 1% TDS deduction on EVERY transaction (unless you do less than like $200 cumulative for whole year), which is going to kill the entire thing.
The guy who is paying has to deduct 1% then deposit it in fiat online to govt (IRS equivalent called Dept of Income Tax or DIT) and provide receipt to other party with both parties tax ID numbers (PAN)
So all smart contracts and crypto-crypto swaps and liquidity pools / staking etc or anything automated gets almost stopped
Traders or those doing many transactions in a day like 20-50 or more get a liquidity problem as 50% capital will get stuck for a quarter till govt refunds it to you or adjusts it against your tax dues payable.
The absolute 30% tax would still be doable but NO deductions are allowed, not even mining cost capex opex commission etc.
On top of this they plan to levy GST/VAT on all services and maybe even crypto crypto swaps taking crypto to be a commodity.
And none of this implies crypto is legally allowed. That's an unknown thing but we can assume they don't want to do that except for ponzu schemes. Advertisements are already restricted I think as a huge number of middle and lower income people have bought crypto (small amounts probably) but are being taken for a ride very frequently in news. Fly by night exchanges just take their money and never wvwm but any crypto, just disappear one day.
Probably only qualified investors should be allowed and taxed like normal business profits with costs being allowed to be set off rather than on top line.
There area lot of big blockchain projects including government ones like covid certificates /pass, banks blockchain and so on which are also hindered by the 1% TDS deduction.
It's just a ow way of banning crypto so that people can exit with some losses I guess.
Not many solutions are possible because this thing is very amenable to tax loopholes if you allow any deduction of costs etc.
But people are working on some technical solutions and govt might find out revenue potential is fairly big so they will dilute some regulations.