India's Income Tax Department is using AI and data tools to identify tax evasion in cryptocurrency transactions. The government collected ?437 crore in crypto taxes in 2022-2023 using machine learning and digital forensics to spot suspicious activity.

Tax authorities match deducted at source (TDS) data from crypto exchanges to improve compliance. The introduction of the Crypto-Asset Reporting Framework (CARF) also enables automated sharing of tax information, aligning India's efforts with international tax agreements.

These moves mark a push for greater transparency in India's digital asset market. Enhanced wallet visibility and automatic data exchange aim to reduce anonymity and curb tax evasion in the crypto space.

India continues to develop regulations focused on consumer protection, cross-border cooperation, and tax compliance, demonstrating a commitment to a more traceable and accountable crypto industry.