India’s Income Tax Department has intensified its efforts to curb tax evasion in the cryptocurrency sector, sending more than 44,000 notices to traders who failed to disclose their virtual digital asset (VDA) transactions in their income tax returns.
In a recent session of the Rajya Sabha (Upper House of the Parliament), India’s Minister of State for Finance, Pankaj Chaudhary, revealed that the Central Board of Direct Taxes (CBDT) had launched enforcement actions against non-compliant crypto users. These include reassessment notices, surveys, and search-and-seizure operations under the Income Tax Act, 1961.
To promote voluntary compliance, the CBDT has initiated targeted awareness efforts through its NUDGE campaign (Non-Intrusive Usage of Data to Guide and Enable). Under this program, a total of 44,057 emails and messages were issued to individuals who were found to be investing or trading in crypto assets but had not reported these transactions in their tax filings.
The Indian government introduced a tax on digital asset income starting in the 2022-23 financial year. Since then, taxpayers have reported approximately ₹705 crore ($80.6 million) in crypto-linked income for FY 2022-23 and 2023-24 combined.
These tools help cross-reference information provided in tax filings with actual transactions reported by Virtual Asset Service Providers (VASPs) via TDS returns. Discrepancies identified through this system are followed up with enforcement actions to ensure accurate reporting and recovery of tax dues.
