India Uncovers $104M in Hidden Crypto Income, 44,000 Notices Issued

India's tax authorities uncovered more than ₹888 crore ($104 million) in undisclosed cryptocurrency income during the 2025-26 financial year and issued over 44,000 compliance notices, according to the income tax department.

The crackdown builds on the country's 2022 crypto tax regime. That law imposes a 30% tax on gains from digital assets and a 1% tax deducted at source (TDS) on every trade. The TDS system gives the government a real-time record of who is trading and how much. Authorities cross-reference that data against income tax returns to spot gaps.

The 44,000 notices represent the first large-scale result of that data-matching exercise. Traders who reported no crypto income but had TDS deductions flagged against their PAN cards are the primary targets. The government has also been collecting transaction records from exchanges under anti-money laundering rules.

For investors, the notices carry potential penalties and interest on unpaid tax. The 30% rate leaves no room for deductions or exemptions, making compliance expensive. Some traders may face scrutiny for prior years as well, though the department has not detailed any retroactive checks.

The income tax department said it will continue to analyze transaction data and issue notices where discrepancies exist. The 44,000 notices cover the 2025-26 financial year.