India Just Sent 44,000 Crypto Tax Notices and Found Over $100 Million in Hidden Income.

India is getting serious about crypto taxes. The country’s Income Tax Department has just issued over 44,000 notices to people involved in virtual digital assets (VDAs), and the results are eye opening.

After comparing what investors reported on their tax filings with actual transaction data from crypto exchanges, officials uncovered around $104 million (₹888 crore) in undeclared income. That’s a lot of unreported trades, swaps, and transfers.

So what’s changing? For starters, tax authorities now have access to exchange data, TDS (tax deducted at source) records, and investor returns. If your filing doesn’t match up, you’re getting a notice.

For the financial year 2025-26, India’s crypto tax rules remain strict:

· 30% flat tax on gains from VDAs

· 1% TDS on eligible transfers

· No deductions except for the cost of buying the asset

· You can’t use losses from one crypto to offset gains from another

And here’s the kicker: You can’t just report your net gains. Each and every trade, swap, or disposal must be reported separately even crypto to crypto swaps are taxable events.

Investors need to use ITR-2 for capital gains or ITR-3 if trading is treated as business income. Both forms now include a Schedule VDA for detailed transaction reporting.

Things are about to get even tighter. Starting in 2027, India is aligning with the OECD Crypto Asset Reporting Framework, which means cross border sharing of crypto account data. Offshore holdings? Not so hidden anymore.

The message is clear: Whether you’re a big trader or just dabbling, missing things like staking income, airdrops, or wallet transfers could trigger an audit. File carefully because the taxman is watching.