India's 2025 Budget Introduces Tax Regulations for Cryptocurrency

According to Odaily, India's Finance Minister Nirmala Sitharaman announced in the 2025 federal budget that cryptocurrencies will be included under Section 158B of the Income Tax Act for reporting undisclosed income. This amendment allows for collective assessment of unreported cryptocurrency gains, aligning them with traditional assets like currency, jewelry, and bullion in terms of tax treatment. Under the new amendment, cryptocurrencies will fall under the definition of virtual digital assets (VDA). The amendment specifies that under the existing definition of virtual digital assets, crypto assets are defined in Section 2(47A) of the Act. Entities required to report will need to provide information on crypto assets as per Section 285BAA of the Act. Signaling concerns for cryptocurrency holders, Indian authorities may impose a tax penalty of up to 70% on previously undisclosed cryptocurrency profits. The document indicates that this penalty could apply to undisclosed crypto gains for up to 48 months following the relevant tax assessment year. The document states, 'The additional income disclosed in the updated Income Tax Return [ITR] will be subject to a total tax and interest of 70%.'