India's tax authorities are intensifying scrutiny of crypto investors, identifying over $104 million in unreported virtual digital asset income. New regulations require detailed transaction disclosures from individuals and exchanges.
India's stricter crypto tax enforcement and detailed disclosure requirements signal a significant shift in regulatory oversight, potentially impacting investor behavior and the operational landscape for crypto platforms within the country.
India's tax authorities are intensifying their crackdown on undeclared cryptocurrency income, identifying over $104 million in unreported virtual digital asset (VDA) activity. This heightened vigilance coincides with the 2026 tax filing season and the implementation of the new Income Tax Act, 2025.
The Income Tax Department has already dispatched more than 44,000 notices to individuals concerning their crypto transactions. The newly enacted legislation requires taxpayers to provide granular, transaction-level details for every trade, token swap, transfer, and disposal, moving beyond simple profit or loss reporting. This applies to activity on centralized exchanges, decentralized finance platforms, and multi-wallet usage.
Crypto exchanges, custodians, and wallet service providers are now mandated to report user-specific transaction data directly to tax authorities. This information will be used to automate reconciliation processes against individual tax returns and blockchain records. Tax professionals note that the expanded reporting requirements could present challenges for active traders across multiple platforms, increasing the risk of scrutiny for inaccuracies or incomplete histories.
Pick the topics you care about. Get only what matters, on your cadence.