Government Reveals Crypto Tax Measures to Strengthen Compliance Oversight
It is unleashing cutting-edge data analytics and forensic tech to crack down on crypto tax evasion, driving aggressive enforcement and surging digital asset revenue collection.
The government is utilizing data analytics tools to trace and detect tax evasion from VDA related transactions.
These efforts include leveraging the Non-Filer Monitoring System (NMS), Project Insight, and the Income Tax Department’s internal databases. Though a centralized, real-time matching system between income tax returns and Tax Deducted at Source (TDS) filings by Virtual Asset Service Providers (VASPs) is not in operation, retrospective analyses are being carried out.
Cryptocurrency taxation is comprehensive. A flat 30% income tax is imposed on gains from transferring VDAs, with no deductions except acquisition cost. A 1% TDS applies to VDA transfers exceeding thresholds to track transactions.
In parallel, the government is ramping up training infrastructure for its enforcement personnel. Kevin Helms explained:
Several capacity-building initiatives are being undertaken by the government to equip officers for effective compliance monitoring and investigation of VDA related transactions
Training programs, specialized workshops and hands-on workshops are regularly conducted by various training institutes under the Income Tax Department. At local level, field offices conduct training sessions and webinars on digital forensics, blockchain analysis, legal frameworks, and handling of digital evidence,” he added. These efforts are further supplemented by partnerships with institutions such as the National Forensic Science University, offering short-term courses in digital forensics to enhance technical capability in crypto transaction monitoring.
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