All about the Latest updates on crypto tax in India

Latest updates on crypto tax in India

Any NRI or resident holding cryptocurrency in India should maintain complete transaction records, report all virtual digital asset transactions in income tax return, ensure tax deducted at source compliance where applicable, Disclose foreign and domestic crypto holdings accurately, and monitor evolving reporting requirements and penalties.

It summarizes major developments in India’s taxation and regulatory treatment of cryptocurrency transactions from February 2022 to April 2026. Key Milestones Shown in the Timeline

• February 1, 2022; Union Budget 2022 introduced a 30% flat tax on income from transfer of Virtual Digital Assets u/s 115BBH of the Income-tax Act.
• April 1, 2022: The 30% tax on crypto gains became applicable.
• July 1, 2022; Section 194S came into effect, requiring 1% Tax Deducted at Source on specified crypto transfers exceeding prescribed limits.
• February 1, 2023; Union Budget 2023 retained the existing crypto tax regime without providing any relief.
• July 31, 2023: Due date for filing Income Tax Return for Financial Year 2022-23, including reporting of crypto gains under the newly introduced Schedule Virtual Digital Asset.
• October 23, 2023: Central Board of Direct Taxes issued Circular No. 19/2023, clarifying provisions relating to Form 10-IF under Rule 21ACA of the Income-tax Rules, 1962.
• December 31, 2023: Last date to file the belated Income Tax Return for Financial Year 2022-23.
• February 1, 2024: Interim Budget 2024 made no changes to existing crypto taxation provisions.
• June 2024: Binance was fined approximately INR 18.82 crore by Indian authorities for non-compliance with Financial Intelligence Unit requirements.
• July 23, 2024: Union Budget 2024-25 upheld the current crypto taxation framework: 30% tax on gains, 1% Tax Deducted at Source on transactions
• July 31, 2024: Due date for filing Income Tax Return for Financial Year 2023-24, including reporting of crypto transactions under Schedule Virtual Digital Asset.
• December 31, 2024: Last date for filing belated Income Tax Return for Financial Year 2023-24.
• February 1, 2025: Union Budget 2025 introduced amendments imposing Penalties up to 70%. Disclosure requirements for undisclosed crypto gains and Retrospective applicability for certain past years
• April 1, 2025; Commencement of Financial Year 2025-26. Start of mandatory reporting of Virtual Digital Asset transactions by individuals and crypto exchanges.
• April 1, 2026: Businesses required to report cryptocurrency transactions to tax authorities within a 30-day window to rectify discrepancies.

Major Crypto Tax Rules Highlighted

• Tax Rate on Crypto Gains: Flat 30% tax on profits from transfer of cryptocurrencies and other Virtual Digital Asset’ No deduction allowed except acquisition cost.
• Tax Deducted at Source Requirement: 1% Tax Deducted at Source u/s 194S on specified crypto transfers above prescribed thresholds.
• Loss Set-off Restriction: Crypto losses cannot be set off against other income, and Losses from one crypto asset generally cannot be adjusted against gains from another asset.
• Reporting Requirement: Crypto transactions must be reported in Schedule Virtual Digital Asset of the income tax return.
• Increasing Compliance: The timeline reflects a gradual shift toward Greater transaction reporting, Enhanced disclosure requirements, Financial Intelligence Unit (a national government agency that combats money laundering) compliance, Stronger enforcement and penalties.

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