India’s Crypto Transactions Cross ₹51,000 Cr in FY25 as TDS Collections Surge 41%

• India recorded over ₹51,000 crore in crypto transactions in FY25, inferred from a 41% rise in TDS collections.
• Tax authorities found TDS non-compliance worth ₹39.8 crore and undisclosed VDA-linked income exceeding ₹1,000 crore.
• Maharashtra and Karnataka accounted for most TDS receipts, as crypto trading persisted despite strict taxes and regulatory ambiguity.

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India recorded more than ₹51,000 crore worth of cryptocurrency transactions in 2024–25, according to new tax collection data tabled in Parliament, signalling that trading activity has continued to expand despite a heavy tax regime and regulatory ambiguity around virtual digital assets.

Data shared by the Ministry of Finance in the Rajya Sabha shows that the government collected ₹511.8 crore as Tax Deducted at Source (TDS) on crypto transactions during the financial year. Since TDS on virtual digital assets is levied at a flat 1% on every transaction, the figure implies total trading volumes of roughly ₹51,180 crore. This marks a 41% jump from FY24, when collections suggested transactions worth around ₹36,270 crore.

The TDS provision, introduced in the Finance Act 2022 and retained in the updated Income Tax Act 2025, requires exchanges, brokers, and platforms to deduct 1% at the point of every crypto trade. The framework was intended both as a compliance tool and a means to track fund flows within the largely unregulated segment.

Maharashtra and Karnataka drive collections

The government said Maharashtra accounted for ₹293 crore of the FY25 TDS total, followed by Karnataka with ₹133 crore, underscoring the concentration of trading activity in India’s major technology and financial centres.

TDS collections stood at ₹221.3 crore in FY23 and ₹362.7 crore in FY24, placing the cumulative value of declared transactions across three years at nearly ₹1.1 lakh crore.

Tax probes flag non-compliance, undisclosed income

Responding to questions on enforcement, the Ministry disclosed that survey actions under the Income Tax Act were conducted against three crypto exchanges in recent years. These inquiries identified non-compliance with TDS obligations amounting to ₹39.8 crore and uncovered undisclosed income worth ₹125.79 crore.

Broader search and seizure operations under Sections 132 and 133A of the Act unearthed an additional ₹888.82 crore in undisclosed income linked to VDA transactions across several entities, the reply noted.

The Ministry did not publish names of the non-compliant exchanges, citing ongoing enforcement. It also said that India has not undertaken any comparative study of crypto tax models used in countries such as Thailand or Indonesia.

Trading rises despite regulatory flux

India currently treats cryptocurrencies as virtual digital assets rather than legal tender. While not banned, crypto remains subject to strict taxation and limited regulatory oversight. Gains are taxed at 30%, with no offset for losses, in addition to the 1% TDS on all trades.

Despite repeated warnings from the Directorate of Revenue Intelligence and other agencies about misuse for money laundering, smuggling, and illicit remittances, official data suggests that domestic trading volumes remain resilient.

Analysts say high-frequency traders and exchanges have adapted to the TDS structure, even as a portion of Indian users shift activity offshore to avoid friction.

The rise in declared transaction value may partly reflect better compliance and reporting rather than purely organic growth, but it also signals that India’s crypto market continues to deepen even amid regulatory uncertainty.

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Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by the Editorial Team.

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