The Indian government has announced new tax measures concerning undeclared cryptocurrency incomes. Starting February 1, 2025, digital asset holders will face hefty fines for unreported earnings.
What This Means for Crypto Holders
The introduced changes stipulate that any unreported cryptocurrency gains over the past 48 months will be subject to a 70% penalty, plus additional interest and fines. Crypto asset holders will be required to disclose their transactions under the amendment to Section 285BAA of the Income Tax Code. Enhanced scrutiny will allow tax authorities to identify undeclared income.
India’s Crypto Crackdown
The Indian government is implementing tough measures on crypto taxation, following a series of actions in 2024. In December, India uncovered ₹824 crore ($97 million) in unpaid Goods and Services Taxes from multiple crypto exchanges. These actions indicate a broader effort to monitor crypto-related financial activities.
Global Trends in Tax Control Intensification
India is not the only country tightening its grip on cryptocurrencies. In June 2024, the U.S. Internal Revenue Service introduced new reporting rules for digital assets. While these measures have faced backlash in the US, India has taken a stricter approach by imposing direct penalties on unreported gains.
The Indian crypto market faces growing regulatory pressure. While future revisions to the government's stance are possible, the current approach indicates heightened financial scrutiny.
