Indian cryptocurrency holders who fail to disclose their earnings could face a 70% tax penalty, as authorities tighten enforcement on digital asset taxation. The Income Tax Department has issued new warnings, emphasizing that undisclosed crypto gains will be treated as “undisclosed income”, subjecting them to hefty tax rates and additional penalties. The move comes as India continues its strict regulatory stance on digital assets, requiring full transparency from investors.
Under India’s existing crypto tax framework, profits from digital asset transactions are already taxed at 30%, with an additional 1% tax deducted at source (TDS) on transactions exceeding a set threshold. However, authorities are now stepping up enforcement against individuals and entities failing to report their holdings, classifying such income under the Black Money Act. This could lead to penalties as high as 70%, including back taxes and interest charges.
The crackdown signals the government’s intent to close tax loopholes and ensure compliance with digital asset regulations. Despite India’s harsh tax policies, crypto adoption remains strong, with many investors exploring offshore exchanges and decentralized platforms to minimize tax burdens. However, the new penalties indicate that authorities are intensifying their oversight and may increase monitoring of foreign crypto transactions.
As regulatory scrutiny grows, Indian crypto holders are urged to ensure full compliance with tax laws to avoid severe financial penalties. While the country has yet to introduce a comprehensive framework for crypto regulation, these latest tax measures reinforce India’s tough stance on digital assets, potentially shaping the future of the industry within the region.
