India Cracks Down On $104M Undisclosed Crypto Income Amid Tax Season
Highlights
- India has moved to tighten rules for crypto tax reporting.
- The new regulations direct citizens to report their detailed crypto transactions data.
- Regulators have asked crypto exchanges to submit user data on transactions executed.
In the 2026 filing season, India’s tax authorities will be more vigilant against crypto investors. This comes after they found a virtual digital asset (VDA) income of over $104 million that was not reported.
India Takes Against Unreported Crypto Income
India has tightened its crackdown on crypto transactions. The Income Tax Department has already issued more than 44,000 notices related to crypto transactions, per The Economic Times report. Authorities are said to have found over Rs 888 crore ($104 million) of unreported income linked to VDA activity.
The new compliance drive arrives as India’s new Income Tax Act, 2025, came into effect on April 1 2026 and superseded the 1961 Act, which served its purpose for decades.
The tax regime for crypto assets isn’t drastically different in the coming fiscal year, FY25-26. However, the enforcement measures and reporting requirements are much more stringent.
As it stands, profits will still be taxed at a flat rate of 30% from crypto trades. Eligible transfers will also be taxed at 1% at source (TDS). Under Schedule VDA, however, investors are now expected to provide much more detailed disclosures of transactions.
India’s taxpayers are now asked to disclose transaction-level information. It includes details on each trading, token swap, transfer, and disposal event, rather than just reporting their overall profits or losses. The requirement is enforced on centralized exchanges as well as decentralized finance platforms and multi-wallet activity.
Authorities Urge Crypto Exchanges & Custodians To Comply
The report highlighted that crypto exchanges, custodians and wallet service providers are now required to report directly to tax authorities on a per-user basis with transaction details.
The data submitted will be used to automate the reconciliation with individual tax returns and blockchain records. Recently, Coinbase re-entered India, hence, it could also be subject to these compliance measures.
Reporting the expanded amount of information is likely to pose issues for those with active trading accounts across multiple platforms, per tax professionals.
Inaccuracies such as missing records, incomplete wallet histories or discrepancies in transaction records can be more likely to catch the eye of authorities running data verification checks. Such inaccurate records could lead to legal and disciplinary actions.
The stricter regulation comes amidst India’s larger push to overhaul the regulatory framework of crypto trading as more citizens invest in digital assets.
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