India Crypto Tax Alert: Section 148A Notices Target Unreported Trades

India’s tax authorities

This usually happens when the tax department sees only partial transaction data.

Users who traded across several platforms are more likely to get flagged. A typical flow, such as CoinSwitch to Binance, then to a wallet, and later to another exchange, can create gaps in the data.

If the system sees only deposits or withdrawals without the full chain, it may treat transfers as fresh income. This leads to inflated estimates and triggers notices.

Another major red flag is not filing an ITR for AY 2022–23 despite having crypto activity. In such cases, the risk score rises sharply.

Also Read : No Crypto Tax Cuts in India Budget 2026, New Penalties Introduced for Non-Compliance

148A Notice Is Not a Tax Demand

Importantly, a Section 148A notice is not a final tax demand. It is a show-cause notice asking the taxpayer to explain the mismatch before the assessment is reopened.

Recipients are advised to reconstruct all transactions, calculate actual gains or losses, and submit supporting documents. In many cases, proper reconciliation can resolve the issue.

The development signals that crypto transactions in India are now fully traceable through AIS data, exchange reporting, and KYC records.

 With enforcement increasing, more notices for FY 2021–22 and FY 2022–23 are likely.

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