Excerpt from Bitcoin.com Article, Published on July 27, 2025
India’s government has introduced important new measures to strengthen compliance and oversight related to crypto tax in the Union Budget 2025. These changes aim to tighten reporting rules on virtual digital assets (VDAs), including cryptocurrencies and NFTs, addressing gaps in tax collection and regulatory transparency.
Under the updated framework, taxpayers dealing with crypto assets must adhere to stricter disclosure mandates. The amended tax code now requires all exchanges, intermediaries, and other crypto-related entities to report transaction details promptly to income-tax authorities. This reporting obligation aligns crypto tax compliance with similar frameworks used for mutual funds and stock exchanges. The government’s goal is to identify undeclared crypto income and reduce tax evasion.
The existing 30% flat tax rate on crypto gains is maintained, but with broadened scope: undisclosed crypto holdings or profits can now be subjected to higher tax rates and mandatory block assessments under Section 158B of the Income Tax Act. The provisions for search and seizure can be applied to crypto assets, marking a significant shift in enforcement power. Tax authorities can also impose penalties reaching up to 70% of unpaid taxes plus interest and fees for previous years’ undisclosed crypto income.
Experts highlight that these crypto tax measures seek to clamp down on undeclared offshore wallets and improve transparency. The government also introduced Schedule VDA, a dedicated section in Income Tax Returns for reporting crypto-related income, simplifying compliance for individual taxpayers and businesses.
While the crypto tax rules remain stringent, the enhanced reporting and regulatory mechanisms signal a stronger commitment to capturing crypto-related revenue and ensuring that digital asset holders pay their fair share in taxes. Crypto traders and investors in India should prepare to meet these evolving compliance demands to avoid penalties and legal challenges.
To delve deeper into this topic, read the article at Bitcoin.com.
