When Finance Minister Nirmala Sitharaman stepped up to deliver the Union Budget 2025, she didn’t just outline fiscal priorities — she fired a fresh salvo in India’s regulatory battle against unaccounted cryptocurrency transactions.
Sitharaman proposed that “virtual digital asset” be formally included in the definition of undisclosed income, signaling a decisive shift in the government’s approach to digital currencies.
This move is more than just a tax update. It comes in the wake of mounting concerns over unregulated cryptocurrencies being used to mask illegal transactions. Under the new proposal, cryptocurrencies will fall under Section 158B of the Income Tax Act, a provision dedicated to reporting ‘undisclosed income’. This change isn’t just symbolic — it hands sweeping powers to government agencies, allowing them to conduct block assessments or investigations into traders’ unreported crypto holdings.
The Budget document said, “It is proposed to add the term ‘virtual digital asset’ to the said definition of undisclosed income of the block period.”
Further tightening the noose, the government has proposed a clear timeline for such investigations. “The time-limit for completion of block assessment is proposed to be made as twelve months from end of the quarter in which the last of the authorisations for search or requisition has been executed,” the Budget document noted.
This is not an isolated development. Two years ago, India brought the cryptocurrency sector under anti-money laundering laws. The Finance Ministry confirmed that these provisions now apply to crypto trading, safekeeping, and related financial services. On top of that, the country already enforces strict tax measures on crypto transactions, including trading levies.
The Budget did not make any changes to the 30 percent tax on crypto income or the 1 percent TDS on crypto transactions, which were implemented in July 2022. In the previous budget, Finance Minister Nirmala Sitharaman excluded crypto futures and options from the proposed increase in STT.