Govt collected ₹512 crore TDS on crypto transactions in FY25

The central government has collected 511.83 crore as tax deducted at source (TDS) during 2024-25 (Apr-Mar) on cryptocurrency and other virtual digital asset transactions, Minister of State for Finance Pankaj Chaudhary said in a reply in the Rajya Sabha on Monday to questions asked by Pulla Mahesh Kumar and Magunta Sreenivasulu Reddy.

In his reply, Chaudhary submitted a chart of tax deducted for crypto transactions across all states and union territories in the last three financial years.

In 2022-23, the TDS collected was ₹221.27 crore, in 2023-24 it was ₹363 crore, and in 2024-25 it was ₹512 crore.

The Indian government collects a flat 30% tax on all profits from transactions of cryptocurrencies, which are classified as Virtual Digital Assets (VDAs). Moreover, a Tax Deducted at Source (TDS) of 1% is also changed on every digital asset transaction.

Maharashtra, Karnataka major contributors

Maharashtra alone contributed ₹293 crore of the ₹512 crore total tax collected in 2024-25, while Karnataka contributed ₹133 crore.

The questions had also asked for details of those crypto exchanges which have been non-compliant when it comes to tax payments and have also not been applying the TDS deductions to their transactions in the last three years.

The minister, however, did not provide a list of these exchanges, but said that some of these Virtual Asset Service Providers (VASPs) have not been with the government's TDS provisions.

In their 3rd and 4th questions, the MPs wanted to know "Whether the Government has conducted a study/survey regarding the non-payment of TDS deductions on crypto-currency transactions during the last five years" and, if it has, they sought "details regarding the list of exchanges identified and action undertaken against such exchanges during the last three years, year-wise."

The minister did not provide the names of the exchanges, but did say that survey actions under the Income Tax Act was carried out against 3 crypto exchanges and it was found that they had not complied with TDS requirements to the tune of ₹39.8 crore and had undisclosed income to the tune of ₹125.79 crore.

He also said that other surveys carried out revealed that ₹888.82 core undisclosed income related to VDA transactions were detected against "various entities".

Lastly, the MoS said that India has not done any study for the implementation of crypto taxation models as seen in countries like Thailand and Indonesia.

Is crypto regulated in India?

The government and the Reserve Bank of India (RBI) classify cryptocurrencies as “virtual digital assets” rather than legal tender. While the government has not banned crypto, it remains largely unregulated, with limited oversight and taxation.

Just last week, the Directorate of Revenue Intelligence (DRI) said that stronger regulatory frameworks, advanced forensic tools and global cooperation are required to curb the misuse of digital assets. This came as cryptocurrencies are increasingly being used for smuggling and money laundering, Mint reported earlier.