- SUMMITS
- NEWS & MEDIA
India’s cryptocurrency market recorded transactions worth ₹51,000 crore ($6.12 billion) in 2024–25, a 41 percent increase on the previous year. The rise reflects growing use of virtual digital assets amid evolving government policy and institutional activity. India has become one of Asia’s largest crypto markets, driven by younger investors and fintech adoption. Despite high taxation and the absence of formal regulation, digital assets such as Bitcoin, Ethereum and stablecoins are being used as alternative investment options.
As reported by The Hindu, data presented in Parliament reveals the Ministry of Finance collected ₹511.8 crore ($61.42 million) as Tax Deducted at Source (TDS) from cryptocurrency trades. At a 1 percent TDS rate, this equates to ₹51,180 crore ($6.14 billion) in total transactions during FY 2024–25, reflecting higher trading volumes and compliance. India’s 1 percent TDS on crypto transfers, introduced under the Finance Act 2022, was designed to track transactions and ensure proper reporting of gains. Although initially criticised for discouraging activity, the rule has become a key source of data on market size.
India’s cryptocurrency market has recorded steady growth over the past three years, with transactions rising from ₹22,130 crore in 2022–23 to ₹36,270 crore ($4.35 billion) in 2023–24, and further to ₹51,180 crore ($6.14 billion) in 2024–25. This 41 percent year‑on‑year increase means the market has more than doubled in two years, despite ongoing regulatory uncertainty.
The government collected ₹511.8 crore ($61.42 million) in Tax Deducted at Source (TDS) from cryptocurrency transactions in FY 2024–25, the highest amount to date from digital assets. The figure reflects increased reporting of transactions. A 1 percent TDS on Virtual Digital Assets applies to every transaction, regardless of profit or loss. Introduced in 2022 and retained in the 2025 Income Tax Act, the rule ensures oversight of crypto trading. Each sale of crypto in India triggers a 1 percent deduction paid to the government.
The rule initially reduced trading volumes as frequent traders struggled with liquidity. By 2024–25, many had adapted by holding assets longer, using foreign or decentralised exchanges, and structuring transactions to limit taxable events. These adjustments contributed to market recovery and growth.
Income Tax Department surveys on three major crypto exchanges found TDS non‑compliance worth ₹39.8 crore ($4.78 million). The surveys also uncovered undisclosed income of ₹125.79 crore ($15.09 million), pointing to gaps between policy and execution in the crypto sector. Search and seizure operations detected ₹888.82 crore in undisclosed income linked to crypto, highlighting its use in tax evasion and money laundering and prompting closer scrutiny.
The Enforcement Directorate attached or froze crypto assets worth ₹4,189.89 crore ($502.79 million) under the Prevention of Money Laundering Act. It also reported 29 arrests, 22 prosecution complaints and one individual declared a Fugitive Economic Offender, reflecting the scale of financial crime under investigation.
The Central Board of Direct Taxes (CBDT) reported finding nearly ₹889 crore ($106.68 million) in undisclosed income through investigations into virtual digital asset transactions. The figure highlights the challenges of tracking crypto activity and the government’s growing use of data intelligence.
CBDT issued 44,057 notices to taxpayers who did not report crypto holdings or trades in their income tax returns. Authorities are using data‑matching tools to identify unreported investments.
India continues to face hurdles in regulating crypto, including the absence of a clear legal framework, the cross‑border nature of trades and the rapid emergence of new digital assets and decentralised finance models. Analysts expect a more defined framework by 2026, possibly under the Digital India Act, aimed at balancing investor protection with oversight of financial risks.
Opinions on India’s tax policy remain divided. Supporters say TDS enforces accountability, while critics argue it limits innovation and drives activity offshore. All agree that crypto remains a major part of India’s financial landscape.
