India's New Crypto Tax: Up To 70% Penalty On Undisclosed Gains

India's New Crypto Tax: New Tax Measures For Cryptocurrency Traders

India's New Crypto Tax: All You Need To Know

India is reviewing its crypto regulations amid shifts in the global market, enforcing new tax policies, and even reassessing and reevaluating compliance for investors and exchanges.

Tax On Crypto In India

Up to 70% penalty on undisclosed gains starting Feb 2025 has been decided.

India has started implementing new tax measures for cryptocurrency traders. With the current changes in the Income Tax Act, the profits one gains from one’s cryptocurrency investment will be taxed under the Section 158B, a law that ordinarily deals with money, jewelry and bullion.

In a statement, the government also said that to write in conformity with section 285BAA of the Act, that a reporting entity would need to report information relating to crypto assets. These rollouts are to be implemented from February 1, 2025, as the Indian government works towards legislating the decentralized market.

How Much Tax On Crypto In India: Crypto News

Talking of crypto tax India, one of the penalties those using cryptocurrencies to trade without declaring their gains, as said, are liable to face a penalty of up to 70%. The penalty is relevant to undisclosed gains for up to the four years of the tax assessment year. This was as a result of probes that showed that many cryptocurrency exchanges had not remitted goods and services taxes (GST), while they amounted to 824 crore rupees ($97 million).

Crypto Taxes In India: Reevaluation By India

India is reviewing its cryptocurrency regulations as it is visible that many other countries are changing their positions on digital assets. 

The Indian Economic Affairs Secretary, Ajay Seth, has recently stated, “More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of usage and acceptance. In that stride, we are having a look at the discussion paper once again.”

This may result in the adaptation to global trends.

Crypto Taxes India: Binance Charged A Fine

Binance was fined $2.25M in India, and this was amidst tightening crypto regulations and tax penalties.

In June 2024, Binance faced a penalization of 188.2 million rupees ($2.25 million) for its registration with the FIU. However, it is also true that the enforcement actions have not affected the adoption of cryptocurrencies in the country. So, the authorities are over again reflecting on their stand.

In 2023, it was suggested by India’s market regulator of a multi-agency approach to the regulation of cryptocurrencies, thereby implying a shift in its current policies. Nonetheless, the Reserve Bank of India (RBI) has maintained its apprehensions about the concerns related to private digital currencies. 

While India reassesses crypto rules as the U.S. forms a regulatory group, eyeing global alignment toward the widely spreading space of cryptocurrencies, the upcoming policy review will decide whether or not India will follow a more systematic approach to crypto regulation.

Bottom Line

There was also the Indian Union Budget 2025 declaration yesterday where the Finance Minister Nirmala Sitheraman placed the complete budget for the year in front of the nation and the world.