Budget 2025: The 30 per cent tax on crypto gains and 1 per cent TDS on transactions will continue to be levied as Finance Minister Nirmala Sitharaman skipped crypto from her budget speech. However, she proposed amending the Income Tax Act for entities including crypto exchanges to disclose transaction details related to crypto assets, strengthening the compliance requirements for the crypto stakeholders.
“It is proposed to bring amendment in the Act to provide for that a prescribed reporting entity in respect of a crypto-asset shall furnish information in respect of a transaction in such crypto asset, in a statement as prescribed. It is also proposed to align the definition of virtual digital asset accordingly,” Sitharaman said.
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Speaking on the budget, Sumit Gupta, co-founder, CoinDCX, said, “Despite providing the government with ample justification regarding the ambiguity in the language of the current TDS Section 194S, the concerns around Indian wealth being shifted offshore and the significant loss to the tax exchequer have been overlooked. International exchanges should be obligated to the same 1% TDS as compliant Indian exchanges. As a compliant company, we are disappointed.”
Moreover, the minister also proposed adding the term “virtual digital asset” (VDA) to the definition of undisclosed income of the block period.
The time limit for completion of block assessment is proposed as 12 months from end of the quarter in which the last of the authorisations for search or requisition has been executed, she added.
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This indicates that undisclosed VDAs discovered during searches can be taxed at 60 per cent without deductions or exemptions, similar to other undisclosed incomes found during searches.
“The Union Budget 2025 has maintained the existing tax structure on VDAs. While regulatory clarity remains, the lack of revisions—particularly on the 1% TDS and the inability to offset losses—continues to pose challenges for investors, traders, and industry in the space,” said Edul Patel, CEO and Co-founder of Mudrex.
The block period refers to a specified number of years for which the undisclosed income of a taxpayer is assessed under search and seizure cases (earlier governed by Chapter XIV-B of the Income Tax Act,
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