India reconsiders crypto stance as global adoption pressures mount

India, which has been very critical of and opposed to crypto in the past, is now reevaluating its stance on the assets. 

The Indian government believes that since other countries, including the US, have changed their perception of digital assets, it should not be left behind; therefore, it will revisit its regulations.

The Indian Economic Affairs Secretary Ajay Seth said:

More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of usage and acceptance. In that stride, we are having a look at the discussion paper once again.

Ajay Seth

India rethinks its position on crypto assets, given the shift in the United States

The Indian government imposed heavy taxes and stringent rules on digital assets due to its concerns about their multiple risks.  

For starters, crypto traders in India must still pay a 30% capital gains tax, regardless of whether their profits were from a long-term or short-term investment.

Moreover, in December 2023, the country’s Financial Intelligence Unit (FIU) cracked down on multiple offshore crypto trading platforms, accusing them of failing to comply with their regulations. In June 2024, Binance was also forced to pay 188.2 million rupees, roughly $2.25 million, following its registration with the agency. 

Amit Kumar Gupta, a legal practitioner at the Supreme Court of India, even thought the Indian government was overly strict when setting up crypto regulations, describing the rules as “draconian”. He added that he believed the government only saw digital assets as an avenue for money laundering and terror funding, not necessarily for anything good.

However, with countries increasingly accepting digital assets, India is seemingly under pressure to join them. President Donald Trump has already directed the establishment of a working group to formulate crypto policies and a proper framework. El Salvador continues to build its BTC reserves, while countries like Canada and Australia have maintained a rather friendly stance with digital assets.

India’s Ajay Seth commented on how digital assets are borderless, hinting that the country may not want to miss out on any potential opportunities in the virtual asset space.

The Indian government has introduced new policies for crypto assets

In its latest 2025 financial amendment, which took effect on February 1, 2025, the Indian government included digital assets under Section 158B of the Income Tax Act under Virtual Digital Assets (VDAs).

According to the new amendment, crypto profits will receive the same tax treatment as traditional assets like money and jewellery. Crypto holders will also face a 70% penalty on previously undisclosed gains up to four years after the tax assessment year.

The government saw this tax law necessary, especially after finding over 824 crore Indian rupees, equivalent to $97 million in unpaid goods and service taxes (GST) by several crypto exchanges in December 2024 and roughly 722 crore Indian rupees in unpaid taxes from Binance in August.

Crypto exchanges WazirX, CoinDCX, and CoinSwitch Kuber are particularly under scrutiny for unpaid taxes. 

India’s change in crypto taxation is somewhat similar to the US internal revenue users’, which requires exchanges to reveal their digital assets transactions. However, some, like the Blockchain Association, say the IRS requirements are being pushed to decentralized exchanges. 

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