Indian Finance Minister Nirmala Sitharaman clarified her stance on cryptocurrencies and indirectly said that she will maintain heavy taxation on this space but not hinder any DLT innovation.
India’s population is a very big fan of Bitcoin & crypto price volatility. India is the top country in the world, which has the highest number of crypto traders, which makes India a very big business market for crypto companies. Since April 2022, India’s 30% crypto tax policy imposed pressure on the crypto companies to either face a big loss in revenue or step out from this jurisdiction.
On 4 Feb 2025, Nirmala Sitharaman, Hon’ble Finance Minister of India, appeared in a Budget 2025 round table event, and there she faced questions regarding crypto regulation in India.
News director Rahul Kanwal asked the finance minister about Indian policymakers’ efforts regarding the crypto space amid increasing rapid crypto adoption in America under the presidency of Donald Trump.
The minister stated that India never suppressed the crypto & blockchain tech space, instead helping to bring this matter to a global level discussion via the G20 summit to explore a collaborative approach regarding crypto regulation internationally.
When the news director asked about her opinion regarding the exodus of Indian crypto web3 entrepreneurs to pro-crypto jurisdictions like America, Dubai, Singapore, etc like countries, and also the shift in the crypto trader’s trading activities on international platforms, then Sitharaman said that India was never against Distributed Ledger Technology (DLT) & TDS/TCS were imposed to trace the actors behind the crypto trades.
Also, when Rahul asked whether Indian policymakers are considering rethinking their decision around existing crypto regulation, as crypto regulation is now heading toward a clearer path in the US jurisdiction.
Ultimately Sitharaman tried to keep herself away from the actual question and said that she lives in India, so she will think about India.
The majority of the experts noted that the Indian finance minister is ready to impose heavy tax on this space but not ready to talk about clear crypto regulation, which is indeed creating problems for crypto traders as well as crypto businesses.
India to impose 70% penalty on hiding crypto holding
Just a couple of days ago, the finance minister, during the Budget 2025 announcement, said that digital assets will be included under Section 158B of the Income Tax Act, which reports undisclosed income.
Alternatively, we can say that the Indian tax department invited crypto traders to disclose their hidden crypto holdings; otherwise, they will be ready to face up to 70% penalty on crypto investment gains.
Crypto Tax rules updation globally
Notably, the US IRS body also issued its new crypto tax regulation and decided to make crypto transactions in the US jurisdiction subject to third-party tax reporting requirements for the first time.
All the centralized crypto companies, subject to the new changes, are required to report all the sales and exchanges of digital assets, including cryptocurrencies.
However decentralized crypto trading platforms are going slowly under the regulatory domain but still away from any dedicated regulation framework, so the majority of the traders are shifting toward using decentralized trading platforms (DEXs).
It is expected that new multiple crypto rules are coming this year under the ProCrypto leaders of the USA, which will cover almost all the parts of this space, and also it will impose indirect pressure on other countries to follow the same suit to ensure investor protection against fraud or manipulation.
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