Indian Government Reveals Crypto Tax Measures to Strengthen Compliance Oversight

Key Points

1. Tax on virtual digital assets (VDAs) and cryptocurrencies, implemented under section 115BBH of the Income Tax Act, collected ₹269.09 crore in 2022–23 and ₹437.43 crore in 2023–24.

2. The government uses tools like the Non-Filer Monitoring System (NMS), Project Insight, and internal databases to track tax evasion in VDA transactions.

3. A flat 30% income tax is imposed on gains from transferring VDAs, with no deductions except acquisition cost, and a 1% TDS applies to transfers exceeding certain thresholds.

4. An 18% Goods and Services Tax (GST) is levied on service fees for Indian users from July 7, aligning with Indian laws requiring GST on services.

5. The government is conducting training programs, workshops, and hands-on sessions for the Income Tax Department to improve handling of digital evidence and compliance.