India Intensifies Crypto Tax Enforcement Amid Reporting Gaps

India''s tax authorities are cracking down on unreported cryptocurrency transactions, issuing notices to thousands of taxpayers for undisclosed income from virtual digital assets. The Central Board of Direct Taxes is scrutinizing compliance with Schedule VDA filings, where many high-net-worth individuals either underreported or omitted crypto gains entirely.

The enforcement drive leverages discrepancies between crypto exchanges'' TDS reports and individual tax returns. Section 115BBH imposes a flat 30% tax on VDA transfers with no loss offsets—a rule many investors attempted to circumvent through improper cost indexation claims.

This marks the third phase of India''s NUDGE campaign, which previously targeted offshore assets and political donation fraud. The data-driven approach aims to correct filings without raids, reflecting growing institutional oversight of crypto markets.