The government’s highest tax deducted at source (TDS) on so-called virtual digital assets (VDA) came from crypto exchanges based in Maharashtra at ₹293.40 crore in 2024-25, followed by Karnataka ( ₹133.94 crore), and Gujarat ( ₹28.63 crore), according to data from the finance ministry. To be sure, the TDS data involve locations where crypto-exchanges are based and not locations of actual trades.
Delhi came fourth with total TDS collection in FY25 of ₹28.33 crore, the data showed. Union Budget 2022-23 made a 1% TDS mandatory on the transfer of cryptocurrencies or VDAs from July 1, 2022 to keep a tab on each transaction.
According to the data, total TDS on this account rose by over 41% to ₹511.83 crore in 2024-25 as compared to ₹362.70 in the previous fiscal year . While TDS collections in Maharashtra grew by 30.63%, Karnataka saw a 63.4% jump .
Gujarat, however, saw a year-on-year decline in TDS collectionsby 2.3%. In the case of Delhi, a surge was witnessed as TDS collection jumped from ₹0.99 crore in 2023-24 to ₹28.33 crore in FY25.
TDS collections on account of VDA transactions from other states varied in 2024-25. Total TDS from Rajasthan was ₹15.48 crore in FY25 and from Tamil Nadu was ₹9.97 crore.
{{/usCountry}}TDS collections on account of VDA transactions from other states varied in 2024-25. Total TDS from Rajasthan was ₹15.48 crore in FY25 and from Tamil Nadu was ₹9.97 crore.
{{/usCountry}}According to the data, TDS collections from other states were either miniscule (less than ₹1 crore) or zero.
While presenting the budget on February 1, 2022, Union finance minister Nirmala Sitharaman said: “There has been a phenomenal increase in transactions in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.” Accordingly, she levied a 30% tax on income from transfer of any VDA and made TDS mandatory in order to “capture” the transaction details.
While domestic virtual asset service providers (VASPs) are largely complying with TDS provisions, overseas entities having Indian clients are under the scanner for non-compliance, one official said requesting anonymity. As of November 2025, the total number of registered VASPs with the Financial Intelligence Unit (FIU-IND) was 47.
The government has taken action against around 18 cryptocurrency exchanges for Goods and Services Tax (GST) evasion worth over ₹824 crore, he said. Besides, the Central Board of Direct Taxes’ (CBDT) NUDGE campaign (non-intrusive usage of data to guide and enable) sent over 44,000 communications to taxpayers who either invested, or traded in VDAs without reporting the same in their income-tax returns (ITRs), he said.
Even as VDAs, including cryptocurrencies are not regulated in India, the Prevention of Money Laundering Act (PMLA) empowers FIU-IND to register VASPs for preventing money laundering and terror financing. Both domestic and offshore platforms catering to users based in India are required to register with FIU-IND. The central national agency under the finance ministry was set up in November 2004 for receiving, processing, analyzing and disseminating information relating to suspect financial transactions.