The government collected ₹5.12 billion as tax deducted at source (TDS) during 2024-25 (April-March) on transactions involving cryptocurrencies and other virtual digital assets, Finance Minister Pankaj Chaudhary said on Monday.
The government imposes a flat 30% tax on profits made from cryptocurrency transactions; it also collects a separate 1% TDS on the transaction value every time a digital asset is bought or sold.
The 1% TDS helps the tax department monitor the transactions, while the 30% tax applies only to the profits made from them.
How much TDS has been collected by the government?
TDS collected from such transactions jumped 41% in FY25. ₹3.63 billion in FY24, according to Chaudhary’s written reply to a question raised in the Lok Sabha.
Among India’s states with the highest cryptocurrency activity, Maharashtra and Karnataka together accounted for more than 80% of crypto transactions, with the state’s TDS collection ₹2.93 billion and ₹1.34 billion, or
The government has not conducted any studies to implement tax models for cryptocurrencies, as in other countries such as Thailand and Indonesia, Chaudhary said.
To ensure against money laundering and counter-terrorism financing through these assets, the Financial Intelligence Unit is registering all virtual asset service providers under the Prevention of Money Laundering Act, Chaudhary said. “This registration requirement applies equally to both domestic and offshore platforms that cater to users based in India,” he added.
Are cryptocurrencies 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 cryptocurrencies, they remain 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 needed to curb the misuse of digital assets. This comes as cryptocurrencies are increasingly being used for smuggling and money laundering, Mint reported earlier.
