According to ChainCatcher, Indian crypto asset investors are facing stricter filing and compliance requirements in the 2026 tax season as tax enforcement in India intensifies. The report said incorrect reporting can lead to penalties and scrutiny, placing greater emphasis on detailed recordkeeping throughout the year rather than only calculating annual gains at the time of filing.
Flat 30% Tax and 1% TDS Remain the Core Rules
Under the current framework, gains from crypto assets remain subject to a flat 30% capital gains tax. Transactions above a certain amount are also subject to a 1% tax deducted at source, known as TDS. The rules continue to prohibit offsetting losses across different crypto assets. Although the new Income Tax Act (2025) took effect on April 1, 2026, the report said the core structure of India’s crypto tax regime has remained largely unchanged.
At the filing level, investors must use the dedicated Schedule VDA section in either the ITR-2 or ITR-3 form. This schedule requires transaction-by-transaction reporting. The required records include trades, swaps, transfers, liquidations and other operations, rather than only a consolidated profit figure. For investors who trade frequently or use exchanges, custodians and wallet services, maintaining complete records across the full year has become a central part of compliance.
Authorities Expand Data Matching and Tracking
The report emphasized that the regulatory focus has clearly intensified. Indian tax authorities will obtain user-level transaction data directly from trading platforms, custodians and wallet service providers, then automatically cross-check that information against tax filings. Any inconsistency will be flagged by the system and reviewed.
Data cited in the report showed that Indian tax authorities have already issued more than 44,000 notices and identified about 88.8 billion rupees, or around 930 million U.S. dollars, in undeclared virtual asset income. The tax department is also combining on-chain analytics tools with international data-sharing mechanisms to improve its ability to track crypto activity.
From 2027, India will connect with the OECD Crypto-Asset Reporting Framework, enabling automatic exchange of cross-border transaction data. Holdings on overseas exchanges will also gradually come under the regulatory view. The report listed common filing errors including use of the wrong tax return form, omission of airdrop and staking income, and failure to correctly match 1% TDS records. It added that crypto tax compliance is shifting from after-the-fact correction to real-time traceability, making full-year record management increasingly important for investors.