India Targets 44,000+ Crypto Investors in Massive Tax Evasion Crackdown

India’s government has launched one of its most aggressive enforcement actions yet against cryptocurrency tax evasion, identifying 44,057 investors who failed to declare their virtual digital asset (VDA) transactions.

According to official disclosures, the country’s Income Tax Department used advanced analytics and transaction monitoring tools to detect discrepancies between investor filings and actual trading activity. The sweep uncovered ₹705 crore ($80.5 million) in declared tax liabilities and an additional ₹630 crore ($71.9 million) in undisclosed income from crypto-related transactions.

The crackdown covers both individual traders and institutional investors who did not report their holdings or profits in Schedule VDA of their tax returns, as required under the rules introduced in FY 2022–23.

Enforcement measures included:

• Automated data matching between VDA transactions and tax filings.
• Cross-checking Tax Deducted at Source (TDS) reports from virtual asset service providers.
• Reassessment of returns and, in severe cases, search-and-seizure operations.

The Indian government has signaled its commitment to ensuring accurate tax reporting in the rapidly expanding digital asset sector. With crypto adoption growing across the country, the authorities are expected to continue their focus on compliance, leveraging technology to track transactions and detect underreporting.

This development comes amid a broader global push for stronger cryptocurrency tax enforcement, with India positioning itself among the most proactive jurisdictions in the world.

Key Stats:

• 44,057 investors alerted for non-compliance.
• ₹705 crore in declared tax from VDAs.
• ₹630 crore in previously undisclosed income uncovered.