Indian cryptocurrency holders face up to 70% tax penalty for undisclosed earnings

Odaily Planet Daily News: According to Indian Finance Minister Nirmala Sitharaman's 2025 federal budget announcement, cryptocurrencies will be included in Section 158B of the Income Tax Act for reporting undisclosed income. This amendment allows for collective assessment of unreported cryptocurrency earnings, giving them the same tax treatment as traditional assets such as currency, jewelry, and gold bars. According to the new amendment, cryptocurrency will fall under the definition of Virtual Digital Assets (VDA), which stipulates that: According to the existing definition of virtual digital assets, encrypted assets have been defined in section 2 (47A) of the Act [...] According to section 285BAA of the Act, reporting entities will be required to provide information on encrypted assets As a signal of concern for cryptocurrency holders, Indian authorities may impose tax fines of up to 70% on previously undisclosed cryptocurrency profits. According to the document, this penalty may apply to undisclosed cryptocurrency earnings for up to 48 months after the relevant tax assessment year. The document states: "70% of the total amount of tax payable and interest on additional income disclosed in the updated income tax return [ITR]