In an official statement issued by the Ministry of Finance of India, Minister Pankaj Chaudhary stated that the department has taken action against cryptocurrency traders who violate regulations. These measures include reassessment notices and seizure operations under the Income Tax Act of 1961. This significant development indicates a stricter approach to tax compliance in India's digital asset sector.
The Central Board of Direct Taxes (CBDT) has launched a specific awareness initiative as part of its NUDGE campaign. The program aims to boost voluntary compliance among cryptocurrency operators by sending 44,057 emails and messages to individuals who operated or invested in Virtual Digital Assets (VDA) without declaring them in their tax returns. The Minister of Finance stated:
"To raise awareness among taxpayers regarding the disclosure of VDA and tax payment, CBDT recently launched the NUDGE campaign…taxpayers under which 44,057 emails and messages were sent to selected taxpayers who had invested in and traded VDA (virtual digital assets) but did not report the transactions in the VDA schedule of their… (ITR)."
India has yet to establish clear regulations for cryptocurrencies, lagging behind major global economies like the United States. However, the government has already indicated plans to reevaluate its approach to cryptocurrencies.
Additionally, the Minister of State revealed that the government raised ₹705 crores (approximately $80 million) in taxes from income from Virtual Digital Assets (VDA) between the fiscal years 2023 and 2024. Furthermore, inspections and studies revealed ₹630 crores (USD 75 million) in previously undeclared income from such assets.
