Crypto or Not, Government Cashed In; Over Rs 700 Crore Earned from VDA Tax in Two Years
New Delhi, 22nd July 2025: Despite volatility in cryptocurrency markets, the Indian government has emerged a clear winner—thanks to its tax regime on Virtual Digital Assets (VDAs). In a recent disclosure during the ongoing Monsoon Session of Parliament, the Ministry of Finance confirmed that it had collected over ₹700 crore in VDA-related taxes over the past two financial years.
The information was provided by Minister of State for Finance Pankaj Chaudhary in response to questions raised by Telugu Desam Party (TDP) MPs. The revenue figures come under Section 115BBH of the Income Tax Act, 1961, which became applicable from FY 2022–23.
VDA Tax Revenue Snapshot:
FY 2022–23: ₹269.09 crore
FY 2023–24: ₹437 crore
FY 2024–25: Not yet available
These amounts represent taxes primarily on capital gains from the transfer of cryptocurrencies and other digital assets.
In response to questions about tax losses due to possible under-reporting or misreporting of crypto incomes, the government clarified that no official estimate has been made to date. However, enforcement efforts are ongoing.
Advanced analytics tools like the Non-filers Monitoring System (NMS) and Project Insight are being utilized to identify discrepancies between declared incomes and crypto transaction data. These tools help in cross-verifying taxpayer disclosures with VDA activity.
Although Virtual Asset Service Providers (VASPs) are mandated to deduct TDS on crypto transactions, the government acknowledged that there is no real-time reconciliation system to match these TDS filings with taxpayers’ returns. Nonetheless, regular analyses are conducted to flag mismatches.
Tax Officers Trained for Crypto Investigations
To enhance crypto-related compliance and enforcement, the government has invested in capacity-building for tax officers, including:
-Workshops and training sessions by income tax academies
-Modules on blockchain analytics and legal aspects of digital assets
-Short-term courses in digital forensics in partnership with National Forensic Sciences University (NFSU), Goa
These initiatives aim to empower officers to track, investigate, and prosecute tax evasion in the evolving digital finance space.
