How did crypto score in the Indian budget 2025

At times when you hear the budget speech and see the goodies being rolled out to various industries and sectors you begin to imagine a classroom scenario where the teacher is giving out the marksheets and rewards to students.
However budget is a much more serious matter for a country and especially so when it comes to crypto and its tryst with the Indian government

What India's Budget could mean for crypto taxes & compliance?

India is a land that boasts of the largest population in the world.
With a population of 1.42 Billion people it is seen as a land of opportunity by many industries however when it comes to crypto and related projects the soil is rocky and full of impediments.

For one there is a 30% tax for those citizens that trade in crypto.

With the budget for the new financial year being rolled out on the first of February 2025 there were hopes amongst the supporters of crypto that this tax may be tweaked and perhaps even brought down.

Crypto tax slashing hopes dashed

Contrary to the hopes and wishes of the Indian crypto community and those operating in this space all such hope came crashing down as there was no reduction of taxes.
Currently the 30% tax rate slab on crypto is considered to be quite high and this tax is to be paid for any crypto to stable coin conversion or a withdrawal in fiat currency.
When it comes to crypto taxation the Indian government puts it in the same bracket as gambling, winning in horse races or winning a lottery and levies a tax of 30%
Besides this there is a 1% TDS or tax deduction at source that is to be paid by the user for every transaction.
If there is a loss it does not mean you do not pay this tax. The tax is liable to be paid irrespective of profit or loss.

The new compliance salvo for crypto users

In the new budget that was presented on the first of February 2025 the finance minister not only did not show any inclination towards softening her stand on crypto taxation but instead there is a new compliance clause being added to the already crypto taxation.

Section 285BAA to be introduced in the income tax act, 1961

If implemented it would mean a lot more details would need to be furnished for every crypto related transaction.
As of now the taxation happens for crypto to stable coin trades or crypto to fiat exchange level. Now the section 285BAA once implemented in the income tax act would make it mandatory to report every crypto transaction details.
As per the new rule once implemented any reporting entity which is dealing in crypto assets would be required to furnish the details of all transactions in a prescribed format and a stipulated time frame.

Though the implementation may happen on first April 2026 it could be interpreted as a rule which would mean the exchanges would have to do the additional task of reporting every crypto transaction and perhaps it may be required to furnish the holding as well.

Changes to Finance (No.2) Act 2024

As per the new changes the income tax department can conduct searches for undisclosed virtual digital assets (read crypto) while inspecting accounts for taxation purposes.
For this purpose they have a window of 6 years prior to the time when the search is being conducted.

Simply put this puts more compliance pressure on any person earning crypto.
The six year crypto audit rule comes into effect February first 2025

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Posted Using INLEO