India Crypto Crackdown Unleashes 44K Notices, ₹888 Crore in Hidden Income

The Indian tax department has launched a massive crackdown on cryptocurrency traders, sending over 44,000 notices and uncovering ₹888 crore ($104 million) in hidden income.

The Central Board of Direct Taxes (CBDT) used data from the 1% Tax Deducted at Source (TDS) to match against individual Income Tax Returns (ITR), exposing traders who underreported their Virtual Digital Asset (VDA) gains.

According to India's tax laws, a flat 30% tax is applied to all VDA gains, with no deductions allowed. Additionally, 1% TDS is deducted on every cryptocurrency transfer or sale, and losses from one trade cannot be set off against gains from another.

The government has also made it mandatory for exchanges, wallet providers, and custodians operating in India to submit user-level transaction data directly to the official Department. This has led to automatic checks against what traders report in their returns, making every buy, sell, or transfer a permanent record with the government.