India Crypto Tax Crackdown Hits Record High with 44,000 Notices and ₹888 Crore in Undisclosed Income

India's crypto tax crackdown has entered a stricter enforcement phase, with authorities issuing over 44,000 notices and identifying nearly ₹888 crore ($104 million) in undisclosed virtual digital asset income. The heightened scrutiny comes as Indian investors enter the 2026 tax season under the same core crypto tax structure but with stronger data-matching tools.

Income from the transfer of virtual digital assets remains taxed at 30%, with no deduction allowed other than cost of acquisition and no set-off of losses against other income. Eligible VDA transfers also remain subject to 1% tax deducted at source, giving tax authorities a transaction-level trail across exchanges and reporting systems.

The compliance burden is especially high for active traders, who must report transactions individually, including trades, swaps, disposals, and crypto-to-crypto conversions. Exchanges, custodians, and wallet providers are now required to submit user-level transaction statements to India's Income Tax Department, allowing filings to be checked against platform records, TDS data, Annual Information Statements, and blockchain analytics.