India uncovers $104M in hidden crypto

TLDR

Indias tax authorities have found about $104 million in previously undeclared crypto income and are ramping up enforcement on digital asset taxes.

1. India issued over 44,000 tax notices after matching crypto filings with exchange data, uncovering roughly $104 million in hidden virtual digital asset income.
2. The crackdown sits on top of a strict regime: 30% flat tax on gains, 1% TDS on transfers, and detailed per-trade reporting in the new Schedule VDA.
3. From 20262027, tighter reporting rules and OECD data sharing will make it harder to hide offshore crypto, increasing global compliance pressure on exchanges and investors.

Deep Dive

1. What India Just Uncovered

Indias Income Tax Department sent more than 44,000 notices to crypto investors after cross-checking individual tax returns with data that exchanges and other platforms report.

According to an Indian VDA enforcement report, this process identified over Rs 888 crore, roughly $104 million, in undisclosed virtual digital asset (VDA) income.

Authorities are using these cases as evidence that a large slice of Indias crypto trading activity has not been properly reported under existing rules.

2. How Indias Crypto Tax Rules Work

Since 2022, India has applied a flat 30% tax on VDA gains, with no deductions except acquisition cost, plus a 1% tax deducted at source (TDS) on eligible transfers.

Each trade, swap, or disposal must be reported line by line in Schedule VDA in the income tax return, and losses on one coin cannot offset gains on another. Filing uses ITR-2 for capital gains and ITR-3 for business income, both requiring detailed transaction level reporting.

Non reporting can trigger notices, back taxes, interest, and penalties, with harsher treatment when authorities classify behavior as deliberate misreporting or large scale evasion.

3. What Comes Next For Users And Platforms

Budget 2026 added stricter duties for exchanges, custodians, and wallet providers to submit user level data, making it easier for tax authorities to reconcile TDS trails, exchange records, and taxpayer filings.

From 2027, India plans to align with the OECD Crypto Asset Reporting Framework, which will enable automatic cross border sharing of crypto account data and tighten scrutiny of offshore holdings.

This places pressure on global exchanges serving Indian users to upgrade KYC and reporting pipelines and reduces room for investors to rely on foreign platforms or self custody as a way to avoid detection.

Conclusion

Indias discovery of $104 million in hidden crypto income shows that its data driven tax infrastructure for digital assets is now live and effective. For crypto users and platforms, the environment is shifting from light touch self reporting to automated matching and cross border data sharing, making accurate, detailed reporting a central part of participating in the market.