India’s Schedule VDA, introduced in Income Tax Return forms from Assessment Year 2023-24, has become one of the most closely monitored compliance fields in the country’s tax infrastructure. The Central Board of Direct Taxes has deployed data analytics, cross-matched exchange-reported TDS returns with individual filings, and sent tens of thousands of targeted communications to investors who traded Virtual Digital Assets but filed no corresponding disclosure. As India prepares to implement the OECD Crypto-Asset Reporting Framework from April 2027, the gap between the volume of on-chain activity and the volume of income declared in ITRs has attracted sustained enforcement attention at the parliamentary level.
The data available for 2026 reveals a compliance landscape shaped by three forces: a mandatory flat 30% tax with zero loss-offset rights and no indexation, a 1% TDS mechanism that creates a traceable paper trail for every transaction above prescribed thresholds, and an enforcement machinery that can now classify undisclosed VDA holdings discovered in search operations as undisclosed income taxable at 60% under Section 158B of the Income Tax Act. The discrepancy between TDS collected from VDA transactions and income reported in Schedule VDA is the central empirical problem this article documents.
At KoinX, we help investors and tax professionals navigate India’s VDA tax regime with automated Schedule VDA preparation and reconciliation tools, and the non-compliance statistics below reflect the scale of the reporting challenge facing individual filers across the country.
This article draws exclusively from primary sources: Ministry of Finance written replies to Parliament, CBDT official press releases, the PIB (Press Information Bureau) Year Ender report for 2024, the Income Tax Return Statistics for Assessment Year 2023-24 released by CBDT, the Finance Act 2022 as administered by CBDT, the Finance (No. 2) Act 2024 introducing block assessment provisions, and the Union Budget 2025 Finance Bill incorporating VDAs into the definition of undisclosed income.
Scope and Methodology
This article covers India-specific statistics on Schedule VDA filing rates, reported VDA income, TDS-to-ITR discrepancies, CBDT enforcement actions, and the legal framework governing non-compliance, drawn from data published within the last two years.
Sources were accepted only when the organisation generating the data published it directly: the Ministry of Finance for parliamentary written replies, CBDT for official press releases and ITR statistics, PIB for government year-end summaries, and the Union Budget Finance Bill for legislative amendments. Parliamentary replies are treated as primary government disclosures. The Tax Guru reproduction of Lok Sabha Unstarred Question No. 13 (answered July 21, 2025) is cited because it reproduces the official Ministry of Finance reply verbatim, as confirmed by its content.
Recency was enforced across all statistics: the article covers fiscal years 2022-23, 2023-24, and 2024-25 where official data has been published, and AY 2023-24 and AY 2024-25 for ITR form data. The original fiscal or assessment year is stated in every bullet. No statistic is inferred from another or synthesised from multiple figures.
Geographic scope is India-specific throughout. All figures are in Indian Rupees unless otherwise stated. The article does not include estimates of the size of the tax gap, as the government explicitly confirmed in its July 2025 Lok Sabha reply that no such estimates have been made.
Schedule VDA Filing and VDA Tax Collection: Numbers at a Glance
- Tax collected from VDA income as per Income Tax Returns filed stood at Rs 269.09 crore for FY 2022-23, the first year Section 115BBH was in force, based on the Ministry of Finance’s written reply to Lok Sabha Unstarred Question No. 13 answered on July 21, 2025.
- Tax collected from VDA income as per Income Tax Returns increased to Rs 437.43 crore for FY 2023-24, based on the Ministry of Finance’s written reply to Lok Sabha Unstarred Question No. 13 answered on July 21, 2025.
- Total TDS collected on VDA transfers under Section 194S for FY 2024-25 was Rs 511.83 crore, compared to Rs 362.70 crore in FY 2023-24 and Rs 221.27 crore in FY 2022-23, a 41% increase year on year for FY 2024-25, based on a 2025 written reply to Parliament by the Minister of State for Finance, Pankaj Chaudhary.
- Under the CBDT NUDGE (Non-Intrusive Usage of Data to Guide and Enable) campaign, 44,057 communications were sent to taxpayers who invested or traded in VDAs but did not report these transactions in Schedule VDA of their Income Tax Returns, based on a 2025 written reply to Rajya Sabha by the Minister of State for Finance, Pankaj Chaudhary.
- CBDT search and seizure operations identified Rs 888.82 crore in undisclosed income from VDA transactions, based on a 2025 Lok Sabha written reply by the Minister of State for Finance, Pankaj Chaudhary.
- The government confirmed in its July 2025 parliamentary reply that no estimates have been made regarding projected revenue loss due to under-reporting or misreporting of income from VDA or cryptocurrency transactions, based on the Ministry of Finance’s written reply to Lok Sabha Unstarred Question No. 13 answered on July 21, 2025.
- A total of 47.52 lakh updated returns (ITR-U) were filed across all income categories in India during FY 2024-25, based on the PIB Ministry of Finance Year Ender 2024 press release issued by the Department of Revenue.
- Total ITRs filed for AY 2024-25 up to July 31, 2024 reached a record 7.28 crore, an increase of 7.5% over the 6.77 crore filed for AY 2023-24 during the same period, based on the CBDT official press release dated August 2, 2024.
- 8.50 crore ITRs were filed up to November 22, 2024 for AY 2024-25, 7.32% higher than filings during the corresponding period of the preceding year, based on the PIB Ministry of Finance Year Ender 2024 press release.
- 58.57 lakh first-time ITR filers filed their returns for AY 2024-25 up to July 31, 2024, based on the CBDT official press release dated August 2, 2024.
Schedule VDA Non-Compliance and Reporting Gaps
- The CBDT confirmed that a centralised system for real-time matching of VDA-related Income Tax Returns with TDS returns filed by Virtual Asset Service Providers is not currently in place, based on the Ministry of Finance’s written reply to Lok Sabha Unstarred Question No. 13 answered on July 21, 2025.
- Under the NUDGE campaign, communications were issued specifically to taxpayers who had not reported VDA transactions in their ITRs despite tax being deducted at source by Virtual Asset Service Providers, targeting cases where the discrepancy between TDS deducted and income declared exceeded Rs 1 lakh, based on the Ministry of Finance’s written reply to Lok Sabha Unstarred Question No. 13 answered on July 21, 2025.
- CBDT data analytics revealed that a significant number of individuals violated provisions of the Income Tax Act by either not filing Schedule VDA in their ITRs, declaring crypto income at lower tax rates than the prescribed 30%, or wrongly claiming cost indexation benefits not permitted under Section 115BBH, based on a 2025 CBDT investigation reported by Business Standard.
- The Income Tax Department identified non-compliance related to crypto income covering Assessment Years 2023-24 and 2024-25, flagging thousands of high-risk taxpayers who failed to disclose VDA income or submitted returns with Schedule VDA omitted, based on 2025 CBDT enforcement disclosures.
- Survey actions conducted against 3 cryptocurrency exchanges identified non-compliance with TDS provisions of Rs 39.8 crore and undisclosed income of Rs 125.79 crore, based on a 2025 written reply to Rajya Sabha by the Minister of State for Finance, Pankaj Chaudhary.
- The CBDT VDA-focused NUDGE initiative was the third such data-driven compliance campaign launched within six months, following earlier campaigns targeting foreign asset disclosures and false claims under certain tax deduction sections, based on 2025 CBDT enforcement reporting by Business Standard.
VDA Income Tax Collection Statistics Year by Year
- Section 115BBH of the Income Tax Act, 1961 imposing a flat 30% tax on income from the transfer of Virtual Digital Assets was introduced from Financial Year 2022-23 through the Finance Act 2022, based on the Finance Act 2022 as confirmed in the Ministry of Finance’s written reply to Lok Sabha Unstarred Question No. 13 answered on July 21, 2025.
- VDA income tax collected as per ITRs grew from Rs 269.09 crore in FY 2022-23 to Rs 437.43 crore in FY 2023-24, representing a 62.6% increase over two years, based on the Ministry of Finance’s written reply to Lok Sabha Unstarred Question No. 13 answered on July 21, 2025.
- The government confirmed that data on VDA income tax collected from ITR filings for FY 2024-25 was not yet available as of July 2025, because the ITR filing deadline for that period had not yet elapsed at the time of the parliamentary reply, based on the Ministry of Finance’s written reply to Lok Sabha Unstarred Question No. 13 answered on July 21, 2025.
- Maharashtra led all states in VDA TDS collection for FY 2024-25 with Rs 293.4 crore, followed by Karnataka at Rs 133.94 crore, Delhi at Rs 28.33 crore, Rajasthan at Rs 15.48 crore, and Tamil Nadu at Rs 9.97 crore, based on government data reported in a 2025 parliamentary written reply by the Minister of State for Finance.
- Karnataka recorded the highest year-on-year percentage growth in VDA TDS collections among major states, with receipts increasing by 63.4% from approximately Rs 39 crore in FY 2023-24 to Rs 133.94 crore in FY 2024-25, based on 2025 government data disclosed in a parliamentary written reply.
- Delhi’s VDA TDS collections surged from Rs 0.99 crore in FY 2023-24 to Rs 28.33 crore in FY 2024-25, based on 2025 government data disclosed in a parliamentary written reply by the Minister of State for Finance.
- The government confirmed it is utilising data analytics tools including the Non-Filer Monitoring System, Project Insight, and internal Income Tax Department databases to trace and detect tax evasion from VDA-related transactions, based on the Ministry of Finance’s written reply to Lok Sabha Unstarred Question No. 13 answered on July 21, 2025.
- TDS returns filed by Virtual Asset Service Providers under Section 194S and taxpayers’ ITRs are analysed by CBDT to identify discrepancies in reported VDA transactions and take appropriate enforcement action, based on the Ministry of Finance’s written reply to Lok Sabha Unstarred Question No. 13 answered on July 21, 2025.
- The Income Tax Department used real-time reconciliation between ITRs and TDS reports filed by Virtual Asset Service Providers to uncover mismatches and non-disclosures related to VDA transactions for Assessment Years 2023-24 and 2024-25, based on 2025 CBDT enforcement disclosures.
- Schedule VDA was introduced in ITR forms beginning from Assessment Year 2023-24, requiring declaration of each VDA transfer including the date of acquisition, date of transfer, consideration received, cost of acquisition, and resulting income, based on the Income Tax (First Amendment) Rules, 2023, notified by CBDT on February 10, 2023.
- Under India’s ITR framework, VDA income with capital gains treatment must be reported using ITR-2, while VDA income treated as business income must be reported using ITR-3, with both forms incorporating Schedule VDA from AY 2023-24 onward, based on the CBDT notification of ITR forms for AY 2024-25.
- About 98.35% of ITRs filed up to November 22, 2024 for AY 2024-25 were e-verified, based on the PIB Ministry of Finance Year Ender 2024 press release.
Penalties, Block Assessment, and Undisclosed VDA Income
- The Union Budget 2025 (Finance Bill 2025) introduced an amendment to Section 158B of the Income Tax Act to formally include Virtual Digital Assets in the definition of undisclosed income for the purposes of block assessment, effective from February 1, 2025, based on the Finance Bill 2025 as reported by Business Standard on February 3, 2025.
- Under the block assessment framework, undisclosed income including VDA holdings discovered during a search is taxed at 60% as per Section 113 read with Section 158BA(7) of the Income Tax Act, as amended by the Finance (No. 2) Act 2024, based on the Finance (No. 2) Act 2024 analysis.
- Under-reporting of income including VDA income attracts a penalty of 50% of the tax evaded, and deliberate misreporting attracts a penalty of up to 200% of the tax evaded, under Section 270A of the Income Tax Act, as administered by the CBDT.
- In addition to the 60% block assessment tax rate on undisclosed income, a penalty of 1 to 3 times the tax on undisclosed income is levied under Section 158BFA of the Income Tax Act, based on the block assessment provisions as amended by the Finance (No. 2) Act 2024.
- Failure to deduct TDS on VDA transfers under Section 194S attracts a penalty equal to the unpaid TDS amount under Section 271C of the Income Tax Act as amended by the Finance Act 2023, and a jail term of up to 6 months under Section 276B for delayed payment, based on the Finance Act 2023.
- The Enforcement Directorate attached, seized, or froze crypto-linked proceeds of crime totalling Rs 4,189.89 crore under the Prevention of Money Laundering Act, arrested 29 persons, filed 22 prosecution complaints, and declared 1 accused a Fugitive Economic Offender, based on a 2025 Lok Sabha written reply by the Minister of State for Finance, Pankaj Chaudhary.
ITR-U Updated Return Mechanism and VDA Correction Statistics
- The Union Budget 2025 extended the time limit for filing an Updated Return under Section 139(8A) of the Income Tax Act from 24 months to 48 months from the end of the relevant assessment year, allowing taxpayers to correct VDA non-disclosures for FY 2022-23 until March 31, 2028, based on the Finance Act 2025 as notified by CBDT.
- A total of 47.52 lakh updated returns (ITR-U) were filed across all income categories during FY 2024-25, based on the PIB Ministry of Finance Year Ender 2024 press release issued by the Department of Revenue.
- Filing an updated return (ITR-U) within 12 months of the end of the relevant assessment year requires payment of additional tax of 25% of the total tax and interest payable; filing within 13 to 24 months requires 50%; filing within 25 to 36 months requires 60%; and filing within 37 to 48 months requires 70% of total tax and interest, based on Section 140B of the Income Tax Act as amended by the Finance Act 2025.
- ITR-U under Section 139(8A) cannot be filed if the taxpayer has received a notice under Section 148A after 36 months from the end of the relevant assessment year, or if search and seizure operations have been conducted against the taxpayer, or if the original return showed a loss that cannot be carried forward, based on the provisions of Section 139(8A) of the Income Tax Act.
- Out of the 7.28 crore ITRs filed for AY 2024-25 by July 31, 2024, 45.77% (3.34 crore) were filed in ITR-1, 14.93% (1.09 crore) in ITR-2, 12.50% (91.10 lakh) in ITR-3, 25.77% (1.88 crore) in ITR-4, and 1.03% (7.48 lakh) in ITR-5 to ITR-7, based on the CBDT official press release dated August 2, 2024.
- Over 6.21 crore ITRs out of 7.28 crore filed for AY 2024-25 were e-verified by July 31, 2024, of which more than 5.81 crore (93.56%) were verified through Aadhaar-based OTP, based on the CBDT official press release dated August 2, 2024.
- More than 2.69 crore ITRs for AY 2024-25 (43.34% of e-verified returns) were processed by the Income Tax Department by July 31, 2024, based on the CBDT official press release dated August 2, 2024.
- 96% of ITR filers adopted the Electronic Verification Code mode for verification of ITRs for AY 2024-25, based on the PIB Ministry of Finance Year Ender 2024 press release.
- Approximately 26.35% of ITRs were processed within 1 week of filing during FY 2024-25, compared to 22.56% in FY 2023-24, based on the PIB Ministry of Finance Year Ender 2024 press release.
- Out of a total of 7.28 crore ITRs filed for AY 2024-25, 72% (5.27 crore) were filed under the New Tax Regime and 28% (2.01 crore) were filed under the Old Tax Regime, based on the CBDT official press release dated August 2, 2024.
Schedule VDA Disclosure Rules and Compliance Framework
- Section 115BBH of the Income Tax Act, introduced by the Finance Act 2022, imposes a flat 30% tax on income from VDA transfers with no deductions permitted other than the cost of acquisition, no set-off of VDA losses against any other income or other VDA gains, and no carry-forward of losses to subsequent years, based on the Finance Act 2022.
- Section 194S of the Income Tax Act, effective from July 1, 2022, mandates 1% TDS on VDA transfers exceeding Rs 50,000 in a financial year for specified persons and Rs 10,000 for others; exchanges are required to deduct this on behalf of users for platform trades, while buyers bear the obligation for peer-to-peer transactions, based on the Finance Act 2022 as administered by CBDT.
- The Union Budget 2025 expanded the definition of Virtual Digital Asset under Section 2(47A) of the Income Tax Act to include crypto assets that rely on cryptographic security and distributed ledger technology, effective from April 1, 2026, based on the Finance Bill 2025 as reported by Business Standard.
- Taxpayers are required to report VDA transactions in Schedule VDA of their ITR, specifying for each transaction the sale consideration, cost of acquisition, and resulting income, with VDA-related capital gains also requiring a quarterly breakup under the Capital Gains Schedule in ITR-3, based on CBDT’s ITR notification for AY 2024-25.
- Crypto holdings maintained on foreign exchanges or in overseas wallets may qualify as foreign custodial accounts under Schedule FA of the ITR, requiring additional disclosure by Indian residents independent of Schedule VDA, based on applicable Income Tax reporting requirements for foreign assets.
- India confirmed it will implement the OECD Crypto-Asset Reporting Framework (CARF) from April 1, 2027, which will require automatic exchange of offshore VDA transaction data between India and partner jurisdictions, potentially exposing holdings on foreign exchanges not declared in ITRs, based on a 2025 Ministry of Finance official disclosure.
References
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