India Reconsiders Crypto Policy Amid Global Shifts

According to ShibDaily, India is reevaluating its cryptocurrency policy in response to changing global perspectives, particularly following U.S. President Donald Trump's executive order on digital assets. This order has initiated regulatory discussions in various countries. India is currently reviewing a discussion paper on crypto regulation, which was initially scheduled for release in September 2024 but was postponed due to other priorities. The existing regulations in India focus on anti-money laundering and electronic fund transfers, lacking specific policies for cryptocurrencies. Ajay Seth, the Economic Affairs Secretary, highlighted the cross-border nature of digital assets, stressing that India cannot make unilateral decisions. He noted that several jurisdictions have altered their stance on cryptocurrency usage and acceptance, prompting India to revisit the discussion paper. A panel led by the Department of Economic Affairs Secretary plans to release a consultation paper on crypto regulations by March 2025. This paper aims to collect feedback from stakeholders to develop a regulatory framework for virtual digital assets (VDAs). Despite these developments, India is tightening its crypto tax regulations. Crypto traders in the country may face significant fines for undeclared earnings due to recent changes in tax laws. In the Union Budget 2025, Finance Minister Nirmala Sitharaman announced that digital assets would be included under Section 158B of the Income Tax Act, which deals with undisclosed income. This amendment subjects unreported crypto profits to block assessments, similar to traditional assets like money, jewelry, and precious metals. The new tax regulations, effective retroactively from February 1, 2025, also classify crypto as a Virtual Digital Asset (VDA), requiring disclosure in line with Section 285BAA of the Income Tax Act.