Ever thought you could fly under the radar with your crypto trades? Well, the Indian government is here to remind you: not anymore.
In a recent session in the Lok Sabha, Minister of State for Finance, Pankaj Chaudhary, shared some eye-opening details. India is now going full throttle on crypto tax enforcement, and they’re not just using spreadsheets and paperwork — they’ve brought in data analytics, forensic tech, and even AI tools to catch defaulters.
Let’s break it down.
The Numbers Don’t Lie (crypto taxes)
Crypto taxes were first officially enforced in India during the financial year 2022–23, under section 115BBH of the Income Tax Act. That first year alone brought in ₹269.09 crore (~$32 million) in tax collections. The following year? It shot up to ₹437.43 crore — a nearly 63% jump.
And for 2024–25? The numbers are still cooking since the filing deadline hasn’t passed yet.
But here’s what’s really interesting: while the government hasn’t published an exact figure for how much tax is being dodged, they’ve admitted there’s under-reporting. So, what are they doing about it?
High-Tech Crackdown Mode: ON
According to Chaudhary, the government is actively scanning digital asset transactions using data analytics tools. Some of the heavy-duty systems in play include:
- Non-Filer Monitoring System (NMS)
- Project Insight
- Internal ITD databases
These tools help cross-check transactions and uncover red flags. Even though there’s no real-time matching system (yet) between tax returns and TDS (Tax Deducted at Source) filings by crypto service providers (VASPs), the Income Tax Department is doing retrospective analysis.
One specific campaign, called the “NUDGE initiative,” is targeting cases where TDS was deducted but the income wasn’t declared — especially if the mismatch is more than ₹1 lakh. Yep, they’re watching.
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A 30% Tax & 1% TDS—No Escape
India’s crypto tax regime is already pretty strict.
- A flat 30% tax on gains from crypto transfers.
- No deductions allowed, except for the cost of acquiring the asset.
- A 1% TDS on transfers above certain limits to track movement.
And it’s not just Indian platforms adjusting to this. Global exchanges are aligning too. For instance, Bybit recently announced it will start charging an 18% GST on service fees for Indian users starting July 7. That’s in line with India’s requirement for GST on services offered to residents — whether the company is based in India or not.
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Training the Tax Army for a Crypto World
Here’s something many missed: India isn’t just relying on software. It’s building human expertise too.
The government is actively training its officers to deal with crypto-related tax cases. Regular workshops, hands-on sessions, and webinars are being run — not just on legal stuff, but also on blockchain analysis, digital forensics, and handling digital evidence.
They’re even collaborating with institutions like the National Forensic Science University in Goa, which now offers short-term courses in crypto forensics. Pretty serious stuff.
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Final Thought
India is clearly not treating crypto as a “wild west” anymore. With taxes bringing in hundreds of crores and the tech infrastructure getting sharper, it’s obvious: the golden age of anonymous trading is over — at least in India.So if you’re still trading under the assumption that crypto is “tax-free,” it might be time to think again. Because Big Brother isn’t just watching. He’s analyzing blockchain ledgers and matching TDS reports
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