Indian cryptocurrency holders face a 70% tax penalty for not disclosing earnings

According to India's Finance Minister Nirmala Sitharaman in the 2025 federal budget announcement, cryptocurrency will be included in Section 158B of the Income Tax Act for reporting undisclosed income. The amendment allows for collective assessment of unreported cryptocurrency gains, giving it the same tax treatment as traditional assets such as currency, jewelry and gold bars. According to the new amendment, cryptocurrencies will fall under the definition of Virtual Digital Assets (VDA), with the new amendment stating: "Under existing definitions of virtual digital assets, crypto-assets have been defined in section 2(47A) of this law [...] Under section 285BAA of this law, reporting entities will be required to provide information on crypto-assets." As a signal to concerns from cryptocurrency holders, Indian authorities may impose up to a 70% tax penalty on previously undisclosed cryptocurrency profits. According to this document, this fine could apply for up to 48 months after relevant fiscal years where crypto earnings were not disclosed; it states that an additional income disclosed in updated Income Tax Return [ITR] forms should pay taxes and interest totaling 70%.