India Cracks Down on Crypto Tax Evasion with 44,000 Notices

India's tax authorities have escalated enforcement against cryptocurrency traders, issuing 44,057 notices for unreported virtual digital asset (VDA) transactions. The crackdown recouped ₹630 crore ($75.6 million) in undisclosed income, underscoring the government's hardened stance on crypto taxation since implementing a 30% capital gains levy and 1% transaction withholding tax in 2022.

The Central Board of Direct Taxes' NUDGE campaign represents a dual approach—combining punitive measures with taxpayer education. This mirrors global trends where regulators increasingly treat crypto assets as taxable securities rather than unregulated commodities.

Market participants note the enforcement coincides with declining trading volumes on domestic exchanges. The stringent tax regime has reportedly driven Indian traders toward decentralized platforms or overseas services, creating challenges for tax collection despite the heightened scrutiny.