Indian Crypto Traders Get Tax Notices as Government Tightens Oversight

Source: CryptoNewsNet Original Title: Indian Crypto Traders Get Tax Notices as Government Tightens Oversight Original Link:

Key Points

• Indian crypto traders are receiving tax notices as the government tightens crypto income monitoring.
• Notices under Section 133(6) already list crypto income and demand explanations, not confirmations.
• The tax department is tracking crypto trades through KYC exchanges, TDS, banks, and AIS data.

Tax Notices for Indian Crypto Traders

Indian crypto traders are increasingly coming under scrutiny as the Income Tax Department begins issuing tax notices related to crypto trading income. Over the past few weeks, several traders have reported receiving official tax notices, signaling a stricter approach toward crypto compliance in India.

The notices are being sent under Section 133(6) of the Income Tax Act and are linked to Assessment Year 2024-25. Unlike earlier years, these notices are not asking whether someone traded crypto. Instead, they already list crypto income details and ask taxpayers to explain them.

According to multiple reports, the notices already include detailed information such as:

• Receipts from crypto or Virtual Digital Asset (VDA) transfers
• Profits or winnings from online trading activities
• PAN-linked data matched with AIS (Annual Information Statement) and TIS

This clearly shows that the government already has access to crypto transaction data and is now actively cross-checking it with tax filings.

How the Government Is Tracking Crypto Transactions

Crypto trading in India is no longer operating without visibility. Authorities are tracking transactions through multiple verified sources, including:

• Indian crypto exchanges that follow strict KYC rules
• TDS deductions on crypto trades and clear bank transaction trails
• AIS and TIS reporting systems linked directly to PAN numbers

This means that anyone trading crypto using Indian exchanges or a KYC-linked platform has their activity already visible to tax authorities.

Enforcement Phase, Not Warning Phase

The key takeaway is that this is no longer a warning phase—it is an enforcement phase. The tax department is no longer asking questions; it is asking for explanations backed by records.

For traders who did not properly report crypto gains, this could lead to penalties, interest, or further scrutiny.

Is Crypto Trading Getting Difficult in India?

Crypto trading in India is becoming more regulated, especially for everyday traders. Strict tax rules now apply, including a 30% tax on profits with no loss adjustment and a 1% TDS on most trades.

These rules make quick trading and frequent buying and selling less attractive.

However, some traders see this as a positive step. Crypto is no longer ignored or treated as illegal. It is now officially recognized and taxed, which could bring more transparency and long-term trust to India’s crypto market.