India is tightening tax rules for cryptocurrency traders by introducing new penalties for unreported profits.
Under a new amendment announced in the Union Budget 2025 by Finance Minister Nirmala Sitharaman, digital assets will fall under Section 158B of the Income Tax Act.
This means any undisclosed income from cryptocurrency may face strict tax assessments, similar to how cash, jewelry, or other valuable assets are taxed.
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From February 1, 2025, the government will apply these tax rules retroactively, meaning past crypto gains that were not reported could still be examined. The revised law also categorizes cryptocurrency as a Virtual Digital Asset (VDA).
A section of the amendment states, "Crypto asset has been defined in section 2(47A) of the Act under the existing definition of Virtual Digital Asset <…> A reporting entity, as may be prescribed under section 285BAA of the Act, will be required to furnish information of crypto asset".
One of the most crucial updates is the introduction of a 70% penalty on unreported crypto earnings. If a trader fails to declare gains for up to four years after the tax assessment period, the government may impose this heavy fine. Official documents state:
70% of the aggregate of tax and interest payable on additional income disclosed in the updated income tax return [ITR].
Meanwhile, regulators in South Korea have recently taken a cautious stance on corporate involvement in cryptocurrency trading. What did they say? Read the full story.
