Indian crypto exchange Mudrex and crypto tax platform KoinX have launched a new campaign aimed at helping investors correct previously misfiled or omitted crypto tax returns before the July 31 income tax filing deadline.
The initiative, called Course Correct, focuses on increasing awareness of the Updated Return (ITR-U) mechanism under Section 139(8A) of the Income Tax Act, which allows taxpayers to voluntarily revise tax returns for up to four previous financial years. For the current FY 2026-27 filing season, investors can still amend returns dating back to FY 2021-22. According to the companies, many crypto investors remain unaware that this option remains available even in cases where tax notices have already been issued.
Compliance gaps remain widespread
The campaign details shared with The Crypto Times comes as 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 during FY 2022-23. However, only 1.39 lakh taxpayers disclosed Virtual Digital Asset (VDA) income in their income tax returns.
The companies said many reporting mistakes were caused by misunderstanding the tax rules rather than deliberate tax evasion. Some investors assumed the mandatory 1% TDS deducted by exchanges settled their entire tax liability.
Others believed crypto-to-crypto trades were not taxable because no rupees changed hands, while many did not realize that every taxable transaction must be reported separately under Schedule VDA.
Because Indian crypto exchanges report TDS using investors’ Permanent Account Number (PAN), the Income Tax Department can easily identify mismatches between trading activity and tax returns.
Simplifying crypto tax filing
As part of the campaign, Mudrex users can connect their trading history directly to KoinX to generate consolidated tax reports across multiple exchanges and wallets. KoinX will also provide expert-assisted tax filing services, including ITR-U submissions for previous years where corrections are required.
The companies said the integration is designed to simplify a process that often involves reconciling transactions across multiple platforms.
“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,” said Edul Patel, Founder and CEO of Mudrex.
He also said the campaign is intended to encourage investors to correct their returns before tax authorities initiate further action. Punit Agarwal, Founder and CEO of KoinX, said filing an updated return voluntarily is generally less costly and less burdensome than responding to a tax notice after authorities detect discrepancies.
“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,” Agarwal said.
Tighter tax oversight ahead
The campaign also comes ahead of broader international tax reporting requirements.
Beginning next year, India is expected to start receiving crypto transaction data from overseas jurisdictions under the OECD’s Crypto-Asset Reporting Framework (CARF), expanding visibility into transactions conducted on foreign crypto platforms.
The Finance Bill, 2026, has also expanded access to the ITR-U mechanism. Previously, taxpayers who received reassessment notices under Section 148 were largely unable to file updated returns. The amended provisions now allow taxpayers to submit updated returns even after reassessment proceedings have begun.
As tax authorities gain access to both domestic TDS records and cross-border crypto transaction data, voluntarily correcting past tax filings is likely to become increasingly important for investors seeking to avoid future notices and penalties.
Also Read: Tax Rules Push 80% of India’s Crypto Trading Into Unregulated Futures
