India’s Tax Department Targets 44,000 Crypto Investors in Compliance Push

The Indian Income Tax Department has escalated its scrutiny of cryptocurrency transactions, dispatching 44,057 compliance notices to taxpayers who failed to report virtual digital asset (VDA) activity in their FY 2024–25 filings. The campaign, dubbed "NUDGE," underscores the government's aggressive stance on tax transparency for crypto gains.

Authorities have already recovered ₹705 crore ($84 million) in VDA taxes for FY23-24, with an additional ₹630 crore ($75 million) identified as undeclared income during enforcement actions. The 30% capital gains tax on VDAs—accompanied by a 1% TDS on trades—now faces stricter enforcement, with non-compliance triggering penalties or legal consequences.

Minister of State for Finance Pankaj Chaudhary confirmed litigation in multiple crypto tax evasion cases, signaling a hardening regulatory posture. The move coincides with global efforts to bring cryptocurrency transactions into the taxable mainstream, though India's approach remains among the most punitive with its flat 30% levy.