PANews reported on February 2 that according to Cointelegraph, the Indian government will impose a tax penalty of up to 70% on undeclared cryptocurrency gains. The policy will take effect on February 1, 2025 and will be retroactively applied to undeclared gains in the past 48 months.

The new crypto tax rules are an amendment to Section 158B of the Income Tax Act, which includes crypto assets in the definition of "virtual digital assets (VDA)" and requires reporting entities such as exchanges to disclose relevant information in accordance with Section 285BAA of the Income Tax Act. This means that cryptocurrency earnings will enjoy the same tax treatment as traditional assets such as cash, jewelry, and precious metals, and investors who fail to declare on time may face heavy fines.

Recently, the Indian government has collected $97 million in unpaid taxes from several crypto exchanges, and collected $85 million in illegal taxes from Binance in August 2024. In addition, due to regulatory pressure, the crypto exchange Bybit suspended its Indian services on January 10, 2024.

Analysts believe that this policy may accelerate the shift of Indian crypto investors to decentralized platforms (DEX), but it also shows that the Indian government is strengthening its supervision of the crypto market.