India’s Information Technology department has issued detailed reporting norms for cryptocurrency transactions, tightening tax oversight on virtual digital assets (VDAs) without changing the existing tax levy.
The new guidelines require stricter compliance from entities handling crypto transactions, aiming to close loopholes in the current regulatory framework.
This development comes as the Reserve Bank of India (RBI) has repeatedly warned against the unregulated crypto market, citing risks to financial stability and tax evasion.
The move follows a recommendation from the Parliamentary Standing Committee on Finance, which called for a statutory and regulatory framework for VDAs.
While the 1% Tax Deducted at Source (TDS) on specified transactions remains unchanged, the enhanced reporting requirements signal a shift toward greater transparency and enforcement in the digital asset space.
This development comes as the Reserve Bank of India (RBI) has repeatedly warned against the unregulated crypto market, citing risks to financial stability and tax evasion.
The RBI has advocated for a strict prohibition on cryptocurrency activities, creating a policy tension between the central bank’s hardline stance and the government’s approach of regulating rather than banning.