Crypto Tax Dodgers in India Get the Boot 👮

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The sun beat down on the dusty streets of India, where a different kind of gold rush had taken hold – the crypto craze. But, as with all things that glitter, the taxman cometh, and he’s not happy about the state of affairs.

It seemed that most folks had “forgotten” to report their crypto earnings, mostly in Bitcoin and Ethereum, to the authorities. The government, not one to be trifled with, had taken notice and was now on the warpath. The Central Board of Direct Taxes (CBDT) was hot on the trail of these tax evaders, investigating money laundering and other nefarious activities involving digital assets.

As it turns out, profits from these assets are taxed at a whopping 30% under Section 115BBH of the Income Tax Act. You’d think that’d be enough to make people sit up and take notice, but nope! Most were too busy laughing all the way to the bank to bother with pesky things like taxes.

The CBDT, however, was no slouch. They’d been using data analysis to pinpoint individuals and companies involved in suspicious crypto transactions. Thousands of notices had been sent out to those suspected of being in default, and many more were likely to follow. It seemed the tax department had a few tricks up its sleeve, and those who continued to ignore the rules would soon find themselves on the receiving end of some unwanted attention.

The Prevention of Money Laundering Act (PMLA), recently updated in March 2023 to include crypto transactions, was the government’s ace in the hole. Dealers and exchanges were now required to perform Know Your Customer (KYC) checks and keep records of user activity and transactions, just like banks. As Shashank Agarwal, Advocate, Delhi High Court, put it, “This will enable the government to keep a closer watch on the crypto trading activities.” You can bet your bottom dollar they will!

The writing was on the wall, folks. The government had introduced clear tax rules for Virtual Digital Asset (VDA) transactions in the Union Budget 2022. In addition to the 30% tax on profits, there was also a 1% Tax Deducted at Source (TDS) on every crypto transaction under Section 194S of the Income Tax Act. It was time to shape up or ship out, and those who chose to ignore the rules would do so at their own peril 🚫.

As the saying goes, “You can’t escape death or taxes.” It seemed the crypto tax dodgers in India were about to find out the hard way that this was more than just a clever phrase 😏.

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2025-06-13 23:34