Indian crypto holders face 70% tax penalty on undisclosed gains

Indian crypto holders face 70% tax penalty on undisclosed gains

Cryptocurrency traders in India may face significant tax penalties on previously undisclosed profits under new amendments to the country’s tax laws.

Cryptocurrencies will be included under Section 158B of the Income Tax Act, which reports undisclosed income, according to Indian Finance Minister Nirmala Sitharaman’s Union Budget 2025 announcement.

The amendment allows cryptocurrency gains to be subject to block assessments if not reported, placing them under the same tax treatment as traditional assets like money, jewelry and bullion.

Crypto will fall under the definition of Virtual Digital Assets (VDAs), according to the new amendment, which states:

“Crypto asset has been defined in section 2(47A) of the Act under the existing definition of Virtual Digital Asset[…] A reporting entity, as may be prescribed under section 285BAA of the Act, will be required to furnish information of crypto asset.”

The new crypto tax proposition will be retrospectively applicable from Feb. 1, 2025.

At the end of December 2024, India’s Minister of State for Finance, Pankaj Chaudhary, said the government had found 824 crore Indian rupees ($97 million) in unpaid goods and service taxes (GST) by several crypto exchanges.

The report came a few months after Indian law enforcement agencies demanded 722 crore Indian rupees ($85 million) in unpaid taxes from Binance in August.

Crypto traders face up to 70% tax penalty on undisclosed crypto gains

As a sign of concern for cryptocurrency holders, Indian authorities may issue a tax penalty of up to 70% on previously undisclosed crypto profits.

This penalty may apply to crypto gains that remained undisclosed for up to 48 months after the relevant tax assessment year, according to the document, that wrote:

“70% of the aggregate of tax and interest payable on additional income disclosed in the updated income tax return [ITR].”

The amendments come two weeks after Bybit exchange suspended its services in India on Jan. 10, citing regulatory pressure as it continues to pursue a full operational license from India’s Financial Intelligence Unit.

Crypto tax laws are gaining prominence worldwide

Crypto tax laws gained increased interest worldwide in June 2024 after the US Internal Revenue Service (IRS) issued a new crypto regulation, which will make US crypto transactions subject to third-party tax reporting requirements for the first time.

Starting in 2025, centralized crypto exchanges (CEXs) and other brokers will start reporting the sales and exchanges of digital assets, including cryptocurrencies.

This decision could push crypto investors to decentralized platforms in a “paradoxical situation” that could make tax revenue harder to track, Anndy Lian, author and intergovernmental blockchain expert, told Cointelegraph.

Showcasing the crypto industry’s backlash, the Blockchain Association filed a lawsuit against the IRS in December 2024, arguing that the rules are unconstitutional because they include decentralized exchanges under the “broker” term, extending data collection requirements to them.

 

Source: https://cointelegraph.com/news/indian-crypto-holders-face-70-tax-penalty-undisclosed-gains

Indian crypto holders face 70% tax penalty on undisclosed gains

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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US Crypto Transactions Face New Tax Reporting Rules

US Crypto Transactions Face New Tax Reporting Rules

According to Cointelegraph, cryptocurrency transactions in the United States will soon be subject to third-party tax reporting requirements, marking a significant shift in regulatory oversight as digital asset valuations continue to rise. Starting in 2025, centralized crypto exchanges (CEXs) and other brokers will be required to report sales and exchanges of digital assets, including cryptocurrencies, as per the final regulation published by the US Internal Revenue Service (IRS). This move is intended to assist investors in filing accurate tax returns related to digital asset transactions and to address potential noncompliance issues within the digital currency sector, according to an IRS report issued in June 2024.

Some investors view this regulatory change as an overreach, potentially driving more users towards decentralized trading platforms. Anndy Lian, an author and intergovernmental blockchain expert, highlighted the risk of users migrating to decentralized platforms like Uniswap or PancakeSwap. Lian noted that this shift could create a paradox where the IRS’s efforts to increase tax revenue might inadvertently push users towards environments where tax enforcement is currently challenging. Reflecting the crypto industry’s backlash, the Blockchain Association filed a lawsuit against the IRS in December 2024, arguing that the rules are unconstitutional as they include decentralized exchanges (DEXs) under the ‘broker’ term, thereby extending data collection requirements to them.

While crypto transactions on decentralized finance (DeFi) protocols are currently difficult for tax authorities to trace due to the absence of central intermediaries, advancements in blockchain analytics could make DeFi transactions more traceable by 2027, according to Lian. He suggested that while decentralized systems pose challenges for tax enforcement now, future developments in blockchain analytics and regulatory measures could alter this landscape. To prevent a potential exodus of users, Lian emphasized the need for specialized tax brackets that consider the high volatility and significant retail participation in the crypto market, arguing that treating crypto gains the same as traditional capital gains may not always be equitable.

The rising valuations of cryptocurrencies have also attracted the attention of other jurisdictions. European retail investors should prepare for taxation following the implementation of the Markets in Crypto-Assets (MiCA) framework, as noted by Dmitrij Radin, founder of Zekret and chief technology officer of Fideum, a regulatory and blockchain infrastructure firm. Radin stated that retail users will be required to provide information and data, which will be scrutinized, leading to increased taxation for most Europeans. MiCA, the world’s first comprehensive regulatory crypto framework, went into full effect for crypto-asset service providers on December 30.

 

Source: https://www.binance.com/en/square/post/01-16-2025-us-crypto-transactions-face-new-tax-reporting-rules-19018556510562

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Investors claim Tether’s $118B reserves may face audit and liquidity risks

Investors claim Tether’s $118B reserves may face audit and liquidity risks

Tether’s lack of third-party audits is raising investor concerns about a potential FTX-like liquidity crisis from the $118 billion stablecoin giant.

Investor concerns are mounting around Tether, the issuer of the world’s largest stablecoin USD₮.

Cyber Capital founder Justin Bons, who shared his concerns about Tether being a potentially bigger scam than FTX, catalyzed the latest wave of concerns.

Bons wrote in a Sept. 14 X post:

“[Tether is] one of the biggest existential threats to crypto as a whole. As we have to trust they hold $118B in collateral without proof! Even after the CFTC fined Tether for lying about their reserves in 2021.”

In 2021, the United States Commodities and Futures Trading Commission (CFTC) fined Tether a $41 million civil monetary penalty for lying about USDT being fully backed by reserves.

Concerns over the stablecoin giant’s influence over the crypto space grew louder recently after data revealed that Tether’s market share surpassed 75% of the entire stablecoin market after a 20% increase over the past two years.

A hypothetical Tether implosion would be banking-driven, unlike the FTX collapse

Part of the concerns are fueled by one of the industry’s most notorious black swan events, the collapse of the FTX exchange, which led to $8.9 billion in lost user funds.

While FTX’s collapse was due to its inability to honor mass customer withdrawals of $6 billion within three days, a hypothetical Tether implosion would be related to its banking partners, according to Sean Lee, the co-founder of IDA Finance.

Lee told Cointelegraph:

“Bear market or not, the possibility of Tether imploding is more about its structural connectivity to its underlying assets and banking rails, not so much market movement.  Otherwise, USDT would’ve suffered during the last bear market, but instead, it was actually [USD Coin] USDC that depegged due to their reliance on Silicon Valley Bank and Signature Bank.”

In May 2022, Tether honored over $16.7 billion worth of USDT customer withdrawals within 10 days without any issues.

In contrast, Washington Mutual Bank could not honor $16.5 billion worth of withdrawals within 10 days, which led to what became known as the biggest banking failure in the US in September 2008.

Others believe that Tether is too big to fail. Notably, Anndy Lian, author and intergovernmental blockchain expert, doesn’t expect Tether to face issues but warned that generally, large centralized entities could pose a risk for the cryptocurrency space:

“Cryptocurrencies were originally designed to operate without central control, promoting transparency, security, and user autonomy. However, Tether, as a centralized stablecoin issuer, holds significant influence over the crypto market due to its widespread use for trading and liquidity.”

Cointelegraph has approached Tether for comment.

Tether’s business structure and transparency raise concerns

On Sept. 8, Tether invested $100 million in Adecoagro, acquiring a 9.8% stake in the Latin American agricultural giant.

This latest investment gave us the first disclosure into Tether’s governance structure, according to Cyber Capital’s Bons, who wrote:

“The board of Tether Holdings only has 2 members; Giancarlo & Ludovicos. This implies that the USDT reserves are still not segregated in 2024 & these two have absolute control!”

IDA Finance’s co-founder, Lee, was also concerned about Tether’s lack of transparency. He wrote:

“Tether is structured as a business and their insistence on not providing the level of detailed transparency that ensures real trust from the community and institutional players is indeed concerning.”

Despite Tether boasting over $118 billion worth of reserves in its second quarter “independent attestations conducted by BDO,” Cyber Capital’s Bons claims that Tether has yet to submit its reserves for a third-party audit:

“However, an ‘Auditor’s Report’ or an ‘Accountant Report’ is not a formal audit at all! Despite the claims, Tether has never submitted its alleged reserves to a real unrestricted, third-party audit!”

 

Source: https://cointelegraph.com/news/tether-transparency-business-structure-118b-ftx-concern

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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