BlockBeats News, June 14th. With the strengthening of tax enforcement in India, cryptocurrency investors will face stricter reporting and compliance requirements in the 2026 tax season, where misreporting could trigger fines and audits.

The report notes that under current rules, cryptocurrency gains are still subject to a 30% uniform capital gains tax, with a 1% Tax Deducted at Source (TDS) on transactions above a certain amount, and no cross-asset loss offsetting is allowed. The new "Income Tax Act" (2025) came into effect on April 1, 2026, with the core tax structure framework remaining largely unchanged.

On the reporting front, investors will need to fill out a dedicated Schedule VDA section in the ITR-2 or ITR-3 form and are required to provide a detailed record for each transaction, including trades, exchanges, transfers, and settlements, rather than just summarizing gains.

The report emphasizes that regulatory focus has significantly intensified. The Indian tax authorities will directly obtain user-level transaction data from exchanges, custodians, and wallet service providers and automatically cross-check it with the declared information. Any inconsistencies will trigger system flags and audits.

Data shows that the Indian tax authorities have issued over 44,000 notices and found approximately 88.8 billion rupees (about $930 million) of undeclared virtual asset income. Additionally, the tax department is combining on-chain analysis tools with international data-sharing mechanisms to further enhance tracking capabilities.

Furthermore, starting in 2027, India will align with the OECD cryptocurrency asset reporting framework to achieve automatic cross-border transaction data exchange, and holdings on foreign exchanges will gradually come under regulatory scrutiny.

Analysis points out common mistakes such as incorrect use of reporting forms, overlooking airdrop and staking income, and failure to accurately match the 1% TDS records. The report emphasizes that cryptocurrency tax compliance is shifting from "retrospective reporting" to "real-time traceability," requiring investors to strengthen year-round record management.