Overview
- At a January 7–8 briefing to Parliament’s finance panel, the Income Tax Department warned that virtual digital assets’ core design frustrates identification of owners and tax collection.
- The CBDT has detected data mismatches in over 4,500 VDA cases through e-verification, and rules under Section 285BAA to require third-party reporting could take effect from April 1, 2026.
- Officials highlighted offshore exchanges, private wallets and DeFi as weakening transparency and making cross-border transaction chains nearly impossible to reconstruct.
- India’s strict framework remains in force, including a 30% tax on gains, 1% TDS on transfers and Section 158B allowing retrospective audits with penalties up to 70%, alongside FIU registration of 49 platforms in FY24–25.
- Enforcement has intensified with more than 44,000 notices, seizures and arrests, and agencies signaled continued scrutiny of exchanges ahead of the February 1 Union Budget.