NEW DELHI, IN – India proposed a new amendment that would spell fines and even jail time for crypto tax evaders. India’s Finance Minister, Nirmala Sitharaman, disclosed the nation’s budget on Wednesday detailing its tax deducted at source (TDS) provision which includes new tax penalties.

While the budget announcement did not mention digital currencies specifically, it does not exclude them either. Therefore, in a court hearing a person found guilty of tax evasion could receive the TDS penalty of a fine equal to the amount of liability and/or 3 months to 7 years in prison, per Section 271C of India’s Income Tax Act.

India has heavily regulated crypto, setting the TDS at 1% on every crypto transaction and taxing crypto at 30%. The co-founder of CoinDCX, Sumit Gupta, tweeted that the change is “not good for our country and those building in this sector in India.” 

India is the world’s largest democracy by population and cryptocurrencies are widley used in the country, transferring $3.8 billion since February 2022.