India Issues 44,000+ Notices After Crypto Tax Evasion Sweep
India’s Income Tax Department has issued more than 44,000 notices to cryptocurrency investors suspected of evading taxes. The notices, sent to individuals with undeclared trading profits, require recipients to submit transaction records and proof of tax payments. Enforcement follows the 2022 budget’s introduction of a 30% crypto tax and 1% TDS on digital asset transfers. The crypto tax evasion crackdown underscores India’s broader push to regulate digital assets and close compliance gaps in a market estimated at over $50 billion. Authorities warn that failure to respond may lead to penalties, interest charges or legal action. Analysts say the move could boost transparency but may also dent trading volumes and market sentiment in the short term.
Bearish
The issuance of over 44,000 tax notices signals heightened regulatory scrutiny that typically weighs on market confidence. Similar past crackdowns—like China’s 2021 ban on crypto trading—led to steep price corrections and reduced liquidity as investors fled uncertain jurisdictions. In the short term, increased compliance costs and fear of penalties could suppress trading volumes and dampen sentiment across major tokens including Bitcoin and Ethereum. Over the longer term, however, clearer tax guidelines may attract institutional capital seeking regulated environments, potentially stabilizing the market. Overall, the aggressive tax enforcement is likely to be bearish initially, before any positive effects of formal regulation materialize.