India’s Financial Intelligence Unit, which oversees anti-money-laundering and know-your-customer standards, has introduced stricter onboarding requirements for cryptocurrency platforms. As reported by The Times of India, regulated exchanges must now verify users using live selfie photos and location checks.

These selfies are screened with software that tracks eye and head movement, a step designed to prevent AI-generated deepfakes from slipping through KYC controls. Platforms are also required to log a user’s geolocation and IP address at signup, along with the exact time the account is created. Bank accounts must be confirmed through a small test transfer, and users must provide additional government-issued photo ID as well as verified email addresses and mobile numbers before opening an account.

The updated rules reflect India’s increasingly firm stance on digital assets in a market with more than 1.4 billion people, where broader crypto adoption could significantly expand participation in on-chain activity.

Tax authorities step up scrutiny of crypto

At the same time, officials from India’s Income Tax Department told lawmakers that cryptocurrencies and decentralized finance make tax collection harder. They argued that decentralized exchanges, anonymous wallets and the cross-border nature of crypto transactions weaken traditional enforcement tools, while varying tax regimes across jurisdictions further complicate oversight.

Under India’s Income Tax Act, profits from crypto trades are taxed at a flat 30%, and only the original purchase price can be deducted. Losses from other crypto trades cannot be used to offset gains, limiting the ability of traders to reduce their tax burden.

Sources:

https://timesofindia.indiatimes.com/business/india-business/crypto-rules-tightened-live-selfies-geo-tagging-mandatory-for-users-fiu-rolls-out-tougher-kyc-norms/articleshow/126465571.cms

https://cointelegraph.com/news/india-tighten-kyc-crypto-user-onboarding

https://x.com/Param_eth/status/1913615218607067473