July 25, 2025
5 min read
@CoinMarketCap
India’s tax authority employs AI and international data sharing to identify cryptocurrency tax evaders and improve compliance.
India Uses AI and Global Data Sharing to Combat Crypto Tax Evasion
India’s Central Board of Direct Taxes (CBDT) is leveraging artificial intelligence (AI) and cross-border data sharing to identify cryptocurrency tax evaders. This initiative is part of the OECD’s Crypto-Asset Reporting Framework, aiming to enhance transparency and compliance in the crypto sector. CBDT Chairman Ravi Agrawal confirmed that the department now has access to over 6.5 billion domestic digital transactions. Additionally, there is automatic sharing of crypto tax data between countries to track undeclared crypto income. The Income Tax Department uses AI technology to match tax deducted at source (TDS) data collected from cryptocurrency exchanges with individual income tax returns. Notices are issued to taxpayers if discrepancies exceeding ₹1,200 are detected. Since India implemented a 30% flat tax rate on crypto gains and a 1% TDS on crypto transactions in 2022, the government has collected ₹818 million in crypto taxes. The first year saw collections of ₹323 million, which increased to ₹525 million in the 2023–24 fiscal year under the new tax regime. To balance enforcement with privacy, digital wallet access by authorities is only permitted during official search and survey operations, such as income tax raids.This article contains links to third-party websites for informational purposes only. CoinMarketCap does not control or endorse the content of these sites. Readers should conduct their own research before making financial decisions. The views expressed are those of the author and do not necessarily reflect those of CoinMarketCap.
Source: India Crypto News: India Deploys AI and International Data Sharing to Track Crypto Tax Evaders
FAQ
How does India's use of AI in taxation work?
India's Central Board of Direct Taxes uses AI to analyze domestic digital transactions and cross-reference tax data from cryptocurrency exchanges with individual income tax returns to identify discrepancies.What measures are taken to protect privacy while tracking crypto transactions?
Authorities can access digital wallets only during official search and survey operations to ensure that privacy is balanced with enforcement.Crypto Market's Take
At Crypto Market, we focus on providing AI-powered tools to support cryptocurrency traders in navigating regulatory landscapes effectively. Our platform includes features for reporting and compliance that can help traders align with national and international tax laws. Learn more about our compliance offerings here.More to Read
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