CBDT Detects Rs 630 Crore Undisclosed Income in Crypto Transactions

Last updated: 07 August 2025


The Central Board of Direct Taxes (CBDT) has identified multiple instances of tax evasion linked to investments in cryptocurrency and other Virtual Digital Assets (VDAs), according to a recent statement by the Ministry of Finance in the Rajya Sabha.

Responding to Unstarred Question No. 1842, Minister of State for Finance Shri Pankaj Chaudhary confirmed that the Income Tax Department has taken action against taxpayers found to be non-compliant, including the use of reassessment, surveys, and search-and-seizure operations under the Income Tax Act, 1961.

Over 44,000 Taxpayers Nudged

In a move to enhance voluntary compliance, CBDT launched a targeted awareness initiative under its NUDGE campaign (Non-Intrusive Usage of Data to Guide and Enable). As part of this, 44,057 emails and messages were sent to individuals who traded or invested in VDAs but failed to report the transactions in Schedule VDA of their Income Tax Returns (ITRs).

CBDT Detects Rs 630 Crore Undisclosed Income in Crypto Transactions

Rs 705 Crore Reported in VDA Tax Returns

The government stated that a tax on income from transfer of VDAs was introduced in FY 2022-23 under Section 115BBH of the Income Tax Act. Since then, taxpayers have disclosed VDA-related income worth Rs 705 crore for FY 2022-23 and FY 2023-24 combined.

However, during enforcement actions such as surveys and raids, the tax department uncovered an additional Rs 630 crore in undisclosed crypto-linked income.

Data Analytics Powering Compliance

To tighten oversight of crypto transactions, CBDT is leveraging technology-driven tools like the Non-Filer Monitoring System (NMS), Project Insight, and its internal databases. 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.

The Bigger Picture

With the explosive growth in retail and institutional crypto participation in India, authorities are stepping up monitoring to prevent misuse of digital assets for tax evasion. The government's proactive approach underscores its commitment to building a robust compliance ecosystem around emerging financial technologies.


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Category Income Tax   Report

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