What is the story about?
India’s push to regulate cryptocurrency transactions is yielding results with the Tax Deducted at Source (TDS) collections from Virtual Digital Asset (VDA) trades crossing the ₹1,000 crore mark within just three financial years.
In a written reply to Parliament, the Finance Ministry confirmed that enforcement actions are also ramping up against offshore crypto exchanges flouting compliance norms.
The 1% TDS rule on crypto transactions, introduced in July 2022 under Section 194S of the Income Tax Act, was aimed at tracking and curbing tax evasion in the fast-growing digital asset market.
Data presented in Parliament reveals a sharp, upward trajectory in the 1% TDS collected under Section 194S of the Income-tax Act, 1961, since its implementation:
The Finance Ministry has flagged a major compliance gap, revealing that some offshore cryptocurrency exchanges serving Indian users are failing to follow TDS rules under the Income Tax Act.
To address this, the Income Tax Department has launched targeted enforcement measures. Surveys were conducted on three crypto exchanges, uncovering TDS violations worth ₹39.8 crore under Section 194S. These exchanges also had undisclosed income of ₹125.79 crore.
On a wider scale, aggressive search and survey operations across entities involved in virtual digital asset transactions have exposed undisclosed income totaling ₹888.82 crore, highlighting the government’s intensified crackdown on tax evasion in the crypto space.
In a written reply to Parliament, the Finance Ministry confirmed that enforcement actions are also ramping up against offshore crypto exchanges flouting compliance norms.
The 1% TDS rule on crypto transactions, introduced in July 2022 under Section 194S of the Income Tax Act, was aimed at tracking and curbing tax evasion in the fast-growing digital asset market.
Data presented in Parliament reveals a sharp, upward trajectory in the 1% TDS collected under Section 194S of the Income-tax Act, 1961, since its implementation:
| Financial Year | TDS Collected (₹ Crores) |
| FY2022-23 | ₹221.27 |
| FY2023-24 | ₹362.70 |
| FY2024-25 | ₹511.83 |
| Total (3 years) | ₹1,095.80 |
Among states, Maharashtra tops the collections list with ₹293.40 crore in FY 2024-25, followed by Karnataka, which contributed ₹133.94 crore in the same
period.
| Sr. No. | State | Total Tax Deducted - FY 2022-23 (Amount in ₹ crore) | Total Tax Deducted - FY 2023-24 (Amount in ₹ crore) | Total Tax Deducted - FY 2024-25 (Amount in ₹ crore) |
| 1 | Andhra Pradesh | 0.04 | 0.07 | 0.12 |
| 2 | Assam | 0.0003 | - | - |
| 3 | Bihar | 0.01 | 0.02 | 0.01 |
| 4 | Chandigarh | - | 0.11 | - |
| 5 | Chhattisgarh | 0.05 | 0.0003 | 0.0003 |
| 6 | Delhi | 0.35 | 0.99 | 28.33 |
| 7 | Gujarat | 17.15 | 29.29 | 28.63 |
| 8 | Haryana | 1.24 | 0.83 | 0.64 |
| 9 | Himachal Pradesh | - | 0.02 | 0.02 |
| 10 | Jammu & Kashmir | - | 0.00005 | - |
| 11 | Karnataka | 38.85 | 81.97 | 133.94 |
| 12 | Kerala | 0.13 | 0.05 | 0.04 |
| 13 | Madhya Pradesh | 0.001 | 0.02 | 0.01 |
| 14 | Maharashtra | 142.83 | 224.6 | 293.4 |
| 15 | Odisha | 0.01 | 0.04 | 0.01 |
| 16 | Pondicherry | 0.003 | - | - |
| 17 | Punjab | 0.24 | 0.0018 | 0.05 |
| 18 | Rajasthan | 8.85 | 15.72 | 15.48 |
| 19 | Tamil Nadu | 9.58 | 8 | 9.97 |
| 20 | Telangana | 1.01 | 0.19 | 0.08 |
| 21 | Uttar Pradesh | 0.76 | 0.6 | 0.5 |
| 22 | Uttarakhand | 0.0009 | 0.002 | - |
| 23 | West Bengal | 0.16 | 0.21 | 0.6 |
| TOTAL | 221.27 | 362.7 | 511.83 |
The Finance Ministry has flagged a major compliance gap, revealing that some offshore cryptocurrency exchanges serving Indian users are failing to follow TDS rules under the Income Tax Act.
To address this, the Income Tax Department has launched targeted enforcement measures. Surveys were conducted on three crypto exchanges, uncovering TDS violations worth ₹39.8 crore under Section 194S. These exchanges also had undisclosed income of ₹125.79 crore.
On a wider scale, aggressive search and survey operations across entities involved in virtual digital asset transactions have exposed undisclosed income totaling ₹888.82 crore, highlighting the government’s intensified crackdown on tax evasion in the crypto space.
