The forthcoming paper is expected to draw from international standards, notably those set by the International Monetary Fund and the Financial Stability Board, and will seek public input to shape India's approach to crypto regulation. Currently, the country imposes a 30% tax on crypto gains and mandates exchange registration, yet lacks formal recognition of digital assets. The Reserve Bank of India maintains a cautious stance, citing risks to financial stability and monetary policy, while promoting the digital rupee as a secure alternative.
The absence of clear regulations has led to over 90% of Indian crypto trading moving offshore, driven by high taxes and regulatory uncertainty. Industry stakeholders are hopeful that the upcoming paper will pave the way for a more structured and innovation-friendly crypto ecosystem in India.
In parallel, the Central Board of Direct Taxes has implemented stricter requirements for claiming tax deductions in the assessment year 2025-26. Taxpayers must now provide detailed documentation for exemptions and deductions, including specifics such as insurance company names, policy numbers, housing loan and rent details, and particulars of health insurance. For House Rent Allowance claims, details like the place of work, actual HRA received, rent paid, and landlord information are mandatory. Deductions under sections 80C and 80D require respective policy or receipt numbers, account numbers for PPF, and names of health insurers. Donations to political parties necessitate registration number disclosures, and deduction claims for medical treatment must include information on specific ailments. These measures aim to reduce fraudulent claims by enabling the tax department to cross-verify the eligibility of deductions.
To assist taxpayers in navigating these changes, platforms like TaxBuddy have emerged, offering AI-powered solutions for income tax return filing. TaxBuddy's platform pre-fills ITR forms using data from PAN, Aadhaar, and uploaded documents, reducing manual data entry and minimizing errors. It also provides expert assistance for complex tax situations and post-filing support for notices or audits, ensuring a secure and efficient tax filing process.
Meanwhile, a trend has emerged among affluent individuals investing in agricultural land to capitalize on tax exemptions. In India, income from farming is completely tax-free, and minimal GST on farm goods facilitates cash deposits. This has led to wealthy individuals purchasing farmhouses outside major cities like Mumbai, Delhi, and Bangalore, not just for lifestyle benefits but also to save significantly on taxes. The tax-free status of agricultural income allows for easier management of undisclosed funds, while low stamp duty and capital gains exemptions further enhance the financial appeal of such investments.