India Cracks Down on Crypto Tax Evasion: AI-Powered Global Data Sharing Nets Billions
India’s tax authorities just weaponized AI and international cooperation—and crypto traders are feeling the heat.
Big data meets big enforcement
The Central Board of Direct Taxes (CBDT) now cross-references offshore exchange data with domestic bank records, using machine learning to flag discrepancies. No more hiding behind ‘lost private keys’—the algorithms trace fund flows across borders in real time.
Global tax dragnet tightens
New automatic information-sharing pacts with Singapore, UAE, and Switzerland mean Indian HODLers can’t escape by parking funds abroad. ‘Voluntary disclosures’ surged 300% last quarter as panic spreads.
Finance ministry officials claim the system’s recovered ₹92 billion ($1.1B) in unpaid taxes since 2024. Crypto bros suddenly remembering their ‘number-go-up’ trades have taxable consequences.
Bonus jab: Nothing brings governments together faster than smelling undiscovered revenue—except maybe watching retail traders learn about capital gains the hard way.
India's crypto tax regime overhaul
The crackdown follows India’s 2022 overhaul of its crypto tax regime, which imposes a flat 30% tax on all profits from crypto, and a 1% TDS on transactions above a specified threshold.
The Indian government has collected $818 million (₹700 crore) in crypto taxes since introducing the tax rate in 2022-23, with $323 million (₹269.09 crore) collected in the first year and $525 million (₹437.43 crore) in 2023-24.
The department “utilises data analytics tools to trace and detect tax evasion from VDA related transactions,” Minister of State (MoS) for Finance Pankaj Chaudhary said in a written reply to lawmakers in the Lok Sabha on Monday.
However, "Real-time matching of VIRTUAL Digital Asset (VDA) related transactions, filed in ITRs, with information filed by VASPs is not being carried out," Chaudhary confirmed.
