Mudrex & KoinX Launch Crypto Tax Campaign Ahead of India's July 31 Deadline

Indian crypto exchange Mudrex and crypto tax platform KoinX have launched a joint campaign called 'Course Correct' to help investors rectify previously misfiled or omitted crypto tax returns ahead of India's July 31 income tax filing deadline.

The initiative focuses on raising awareness of the Updated Return (ITR-U) mechanism under Section 139(8A) of the Income Tax Act, which permits taxpayers to voluntarily amend returns for up to four prior financial years. For the current FY 2026-27 filing season, investors can still correct returns dating back to FY 2021-22. The companies note that many crypto investors are unaware this option remains available even if they have already received tax notices.

Compliance gaps remain widespread

Official data highlights significant gaps in crypto tax compliance. According to the Income Tax Department, 6.45 lakh individuals had Tax Deducted at Source (TDS) on crypto transactions in FY 2022-23. Yet only 1.39 lakh taxpayers disclosed Virtual Digital Asset (VDA) income in their returns.

The companies attribute most reporting mistakes to misunderstanding tax rules rather than deliberate evasion. Many investors mistakenly believe that the mandatory 1% TDS deducted by exchanges covers their entire tax liability. Others assume crypto-to-crypto trades are non-taxable because no rupees are involved, and many fail to realize each taxable transaction must be reported separately under Schedule VDA. Since Indian crypto exchanges report TDS using investors' Permanent Account Number (PAN), the tax department can easily detect mismatches between trading activity and returns.

Simplifying crypto tax filing

Under the campaign, Mudrex users can link their trading history directly to KoinX to generate consolidated tax reports spanning multiple exchanges and wallets. KoinX will also provide expert-assisted filing services, including ITR-U submissions for prior years requiring corrections.

Edul Patel, Founder and CEO of Mudrex, said the campaign aims to encourage corrections before tax authorities escalate action. "Most investors who get a notice are not evaders. They are people who found out too late that crypto tax does not work the way they assumed," he said.

Punit Agarwal, Founder and CEO of KoinX, emphasized the cost difference between voluntary correction and reactive compliance. "An updated return filed on your own is a routine correction. The same mismatch the department finds becomes a notice, a penalty, and months of stress. We want to move people from the second bucket to the first," he said.

The initiative also comes ahead of tighter international oversight. From next year, India is expected to receive crypto transaction data from overseas jurisdictions under the OECD's Crypto-Asset Reporting Framework (CARF), expanding visibility into cross-border transactions. Meanwhile, the Finance Bill 2026 has expanded ITR-U access, allowing taxpayers to file updated returns even after reassessment proceedings have begun.