India Intensifies Crypto Tax Enforcement with AI and Global Data Networks

India's Central Board of Direct Taxes (CBDT) is deploying artificial intelligence and international data-sharing mechanisms to identify unreported cryptocurrency transactions. Chairman Ravi Agrawal revealed the department processes over 6.5 billion transaction records annually through AI systems, cross-referencing tax filings with exchange activity.

The initiative specifically targets discrepancies in Tax Deducted at Source (TDS) records, where exchanges are required to withhold 1% of transactions. Enforcement tools are activated only during formal investigations—including searches, raids, and surveys—rather than indiscriminate monitoring.

New regulations effective April 2026 will expand scrutiny to cloud storage and digital wallets, treating them as admissible evidence in tax proceedings. 'The goal isn't surveillance, but compliance,' Agrawal emphasized, noting the measures align with global efforts to curb offshore asset concealment.