India Intensifies Crypto Tax Enforcement Amid Rising Scrutiny

India''s Income Tax Department has escalated efforts to curb tax evasion linked to virtual digital assets, targeting individuals and entities with undisclosed cryptocurrency transactions. The Central Board of Direct Taxes (CBDT) issued compliance notices to thousands of taxpayers as part of its NUDGE campaign, marking the third such initiative in six months.

A 30% flat tax on crypto income, introduced in April 2022 under Section 115BBH, leaves no room for deductions beyond acquisition costs—losses cannot offset gains. Discrepancies surfaced through data analytics reveal mismatches between taxpayer filings and exchange-reported TDS records.

While cryptocurrencies lack legal tender status in India, the government''s enforcement push signals mounting regulatory pressure on the sector. The MOVE follows prior CBDT campaigns targeting offshore assets and political donation fraud.