India reviewed the policy of encryption amid global organizational transformations: Report

Reports have emerged that India would review its approach to encryption after Donald Trump’s friendly position towards the sector.

According to Reuters, Ajay Seth, Minister of Economic Affairs of India, said that the government is reconsidering its position after changes in how other judicial states deal with the assets category.

Change in the approach

On Sunday interview With the post, Seth quoted:

“More than two or two judicial powers have changed their position towards the cryptocurrency in terms of use, their acceptance, and the importance they see in the origins of encryption. In that step, we look at the discussion paper again.”

He also added that since the borders do not limit the encryption, the Indian approach cannot be one side.

The review can delay the publication of India’s discussion paper on digital assets, initially scheduled for the release in September 2024. The document was suspended last year due to other priorities, but it is intended to address how to organize encryption in India.

Nowadays, the assets category are covered only under the funds of money transfer (AML) and electronic funds (EFT). The paper is expected to explore the expansion of the organization and determine the appropriate policy position.

This review follows the developments in the United States caused by President Trump’s embrace of the industry. His most lenient approach, which includes the appointment of a friend of encryption to head the main departments and agencies that oversee the sector and the establishment of a work team to explore the feasibility of the national virtual currency reserve, has optimistic about its future in global markets.

New tax laws to punish unannounced encryption profits

At the same time, encryption traders in India may face major penalties for profits that have not been previously disclosed under new amendments to the country’s tax laws.

In the Federation’s budget 2025, Minister of Finance Nermalla Sitaramann Declare Digital assets will decrease according to Article 158 B of the Income Tax Law, which rules the unannounced income. This change will be subject to encryption gains to prevent assessments if not reported, and they are treated similar to traditional assets such as money, jewelry and precious metals.

The new tax provisions will be applied retroactively from February 1, 2025. The encryption will also be classified as a virtual digital asset (VDA) under the variable tax law, which requires the reporting entities to report encryption information as shown in section 285BAA of income tax law.

India began to impose taxes on digital assets in 2022, and imposed 1 % of the opaque taxes in the source (TDS) on encryption transactions and capital gain service by 30 %. Despite the sector’s calls for clarity and relief, the government continued its strict approach.

In December 2024, Panakaj Chaudhry, Minister of State for India, Panakaj Chaudhry, stated the discovery of $ 99.1 million of unpaid goods and services (GST) by exchanging encryption, including Binance and Wazirix. This was followed by a request to enforce Indian law for $ 86 million as unpaid taxes from Binance in August 2024.