India is considering a revision of its cryptocurrency policy following shifts in global regulatory approaches.
A Change In Approach
In a Sunday interview with Reuters, Ajay Seth, India's Economic Affairs Secretary, discussed the potential policy revision. He noted that several countries have altered their stance towards cryptocurrency usage and acceptance. Consequently, India is revisiting its discussion paper on cryptocurrency. This revision could delay the publication initially scheduled for September 2024. Currently, digital assets are regulated under AML and EFT laws.
New Tax Laws for Crypto Profits
Under the Union Budget 2025, Finance Minister Nirmala Sitharaman announced that digital assets would be covered under Section 158B of the Income Tax Act for undisclosed income. This means that undeclared crypto profits will face block assessments. These new tax regulations will apply retroactively from February 1, 2025. Cryptocurrency will be classified as a Virtual Digital Asset (VDA), requiring disclosure of information.
Implications for Crypto Traders
India began taxing digital assets in 2022 with a 1% TDS and a 30% capital gains tax. In December 2024, India's Finance Minister Pankaj Chaudhary reported $99.1 million in unpaid goods and services taxes.
These regulatory and tax changes in India's crypto policy reflect global trends and could significantly impact local traders.
