India is ramping up its crackdown on cryptocurrency tax evasion by using artificial intelligence (AI) and international data-sharing agreements. Officials warn that trading in digital assets can no longer hide in the shadows of global finance.
Enhancing data analytics and international cooperation
Chairman of the Central Board of Direct Taxes (#CBDT ) Ravi Agrawal revealed that the agency is intensifying its efforts to track down crypto tax evaders through advanced data analytics and cross-border information exchange. India now has access to over 6.5 billion domestic digital transactions and is actively participating in the OECD's Crypto Asset Reporting Framework (CARF). CARF is a global standard requiring crypto platforms to collect and share user transaction data with tax authorities, enabling automatic cross-border exchanges to combat tax evasion.
The Indian Income Tax Department is using AI to match tax deducted at source (TDS) data submitted by crypto exchanges with individual income tax returns (ITR), and automatically sending notifications when discrepancies exceed $1,200. Although access to crypto wallets or accounts is only allowed during searches or investigations, this indicates that India is preparing for a future where transparency and automated data exchange become the norm in an industry known for its anonymity. #indian
This crackdown follows India's reform of the crypto tax regime in 2022, imposing a fixed tax rate of 30% on all profits from crypto and a 1% TDS on transactions above the regulatory threshold. Since 2022-2023, the Indian government has collected $818 million in crypto taxes. Although real-time matching of VDA transactions with information provided by VASP has not yet been implemented, these efforts demonstrate India's determination to regulate digital asset taxation. #anhbacong