India collected ₹705 crore in taxes from Virtual Digital Asset transactions during FY23 and FY24. The Income Tax Department also detected ₹630 crore in undisclosed income from VDAs, signaling a tighter regulatory grip on crypto-related earnings and growing surveillance through advanced data tools.
India’s tax authorities are intensifying scrutiny on digital assets, with the Income Tax Department collecting ₹705 crore in tax revenue from Virtual Digital Asset (VDA) transactions during fiscal years 2022–23 and 2023–24. This figure marks a significant milestone in the government’s evolving framework to bring transparency to the growing crypto ecosystem.
In parallel, tax enforcement agencies identified ₹630 crore in undisclosed income from VDA-related transactions, revealed through a combination of search, seizure, and survey operations conducted during the same period. These findings reflect the tightening of regulatory controls amid concerns about tax evasion in the digital finance space.
The Indian government has rolled out data-driven compliance mechanisms aimed at crypto investors and traders. An internal campaign has been launched to nudge non-compliant taxpayers, targeting those who participated in VDA trades but failed to report them in the designated sections of their Income Tax Returns (ITRs).
Also Read: Undisclosed Income Worth ₹30,444 Cr Detected by IT Dept in FY25
Authorities are leveraging TDS (Tax Deducted at Source) filings by Virtual Asset Service Providers (VASPs) alongside reported income in ITRs to flag discrepancies. This signals a shift toward predictive enforcement, where transactional behavior is tracked through digital trails, reducing reliance on manual inspections.
Tax professionals note that these steps represent India’s maturing regulatory posture toward digital currencies, bringing them in line with formal financial systems. The focus has shifted from merely taxing gains to building infrastructure that monitors, audits, and penalizes irregularities in digital asset reporting.
With VDAs gaining traction among retail and institutional investors, experts believe that future tax collections and enforcement intensity are likely to rise. For stakeholders in the crypto market, accurate disclosure and reporting have become essential—not just for compliance, but for mitigating risks amid rising regulatory surveillance.
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