India’s 1% Tax Deducted at Source on Virtual Digital Asset transactions, introduced through Section 194S of the Income Tax Act and effective from July 1, 2022, remains one of the most closely scrutinized crypto policy instruments globally. Designed as a traceability mechanism rather than a direct revenue tool, the TDS has produced measurable compliance data while simultaneously triggering a well-documented migration of Indian traders to offshore platforms beyond the domestic tax net.
By 2026, the data landscape around Section 194S is significantly richer than at inception. The Ministry of Finance has tabled official TDS collection figures in Parliament spanning three financial years, the Enforcement Directorate and Income Tax Department have disclosed search and seizure outcomes, and India’s Financial Intelligence Unit has published its FY2024-25 annual report detailing penalties levied on non-compliant Virtual Digital Asset Service Providers. At the same time, independent research from the Esya Centre has quantified the scale of uncollected TDS attributable to offshore trading, providing a counterfactual picture of what compliance gaps cost the exchequer.
At KoinX, we develop crypto tax infrastructure for Indian investors and professionals, and the figures assembled in this article reflect the policy and compliance environment our users navigate every filing season. This article consolidates official government data, parliamentary disclosures, FIU-India reports, and published research to provide a statistics-first reference on Section 194S in all its dimensions: revenue trends, state-level concentration, offshore non-compliance, enforcement actions, and the volume effects that continue to define India’s unique crypto tax debate.
Scope and Methodology
All statistics in this article are drawn from primary sources published within the last two years, with original study or disclosure years stated in every bullet. Sources used include official parliamentary disclosures by the Ministry of Finance (Rajya Sabha and Lok Sabha written responses), FIU-India’s FY2024-25 annual report, the CBDT’s enforcement communications as reported in official press releases and parliamentary records, Esya Centre original research reports (a New Delhi-based technology policy think tank that conducted proprietary P2P transaction analysis and exchange surveys), and CoinGecko’s India crypto exchange market data research.
No media summaries, aggregator blogs, or secondary analyses were used as sources. Where Esya Centre reports are cited, these represent original primary research by the think tank using its own methodology, including analysis of 13,000 P2P traders, web traffic data from 20 offshore exchanges, and direct surveys of exchange executives. Parliamentary disclosures and Ministry of Finance statements represent the most authoritative official dataset available on TDS collections in India. Each statistic appears in a single bullet with one inline source URL pointing to the originating document.
Limitation note: FY2024-25 VDA income tax data (Section 115BBH collections) was noted as still awaited at time of the relevant parliamentary disclosure. TDS data from Section 194S, however, is fully reported through FY2024-25 based on official Ministry of Finance responses to the Rajya Sabha in December 2025.
India 1% TDS on Crypto: Headline Statistics for 2026
- Total TDS collected on VDA transactions under Section 194S reached Rs 511.83 crore (approximately $60.1 million) in FY2024-25, a 41% increase from the Rs 362.70 crore collected in FY2023-24, based on data disclosed by the Ministry of Finance to the Rajya Sabha in December 2025.
- Cumulative TDS collections on VDA transactions under Section 194S across the three financial years FY2022-23, FY2023-24, and FY2024-25 exceeded Rs 1,095.8 crore (approximately $128.4 million), based on Ministry of Finance data disclosed to the Rajya Sabha in December 2025.
- Total declared VDA transaction value in India rose to Rs 51,180 crore (approximately $6 billion) in FY2024-25, implying this volume at the prevailing 1% TDS rate, compared to Rs 36,270 crore in FY2023-24 and Rs 22,130 crore in FY2022-23, based on Ministry of Finance data shared in the Rajya Sabha in December 2025.
- Cumulative uncollected TDS from offshore platforms since July 2022 exceeded Rs 6,000 crore (approximately $724 million) as of December 2024, as estimated by the Esya Centre in its December 2024 special issue update on India’s VDA tax policy.
- Between 3 to 5 million Indian crypto users migrated to offshore platforms following the announcement and implementation of the 1% TDS in 2022, based on the Esya Centre’s November 2023 primary research report “Impact Assessment of Tax Deducted at Source on the Indian Virtual Digital Asset Market.”
- Search and survey operations by the Income Tax Department across entities handling VDA transactions uncovered undisclosed income of Rs 888.82 crore, as disclosed by the Ministry of Finance in a parliamentary response in December 2025.
- India’s Income Tax Department issued more than 44,000 NUDGE communications to taxpayers who failed to report VDA transactions despite TDS being deducted on those transactions by Virtual Asset Service Providers, as confirmed by the Ministry of State for Finance in a Rajya Sabha reply in December 2025.
- Maharashtra led all Indian states in FY2024-25 TDS collections from VDA transactions, accounting for Rs 293.40 crore, followed by Karnataka at Rs 133.94 crore, based on Ministry of Finance state-wise data disclosed to the Rajya Sabha in December 2025.
- FIU-India imposed aggregate penalties of Rs 28 crore on non-compliant VDA Service Providers during FY2024-25, based on the FIU-India FY2024-25 annual report.
Section 194S: TDS Revenue Collected Year on Year
- In FY2022-23, the government collected Rs 221.27 crore (approximately $24.5 million) in TDS on VDA transactions under Section 194S, based on Ministry of Finance data disclosed to the Rajya Sabha in December 2025.
- In FY2023-24, TDS collections on VDA transactions rose to Rs 362.70 crore (approximately $40.2 million), based on Ministry of Finance data disclosed to the Rajya Sabha in December 2025.
- In FY2024-25, TDS collections on VDA transactions increased further to Rs 511.83 crore (approximately $60.1 million), marking a 41% year-on-year increase, based on Ministry of Finance data disclosed to the Rajya Sabha in December 2025.
- The total declared VDA transaction volume grew from Rs 22,130 crore in FY2022-23 to Rs 36,270 crore in FY2023-24, an increase of approximately 64%, based on Ministry of Finance data shared in the Rajya Sabha in December 2025.
- The total declared VDA transaction volume rose a further 41% from Rs 36,270 crore in FY2023-24 to Rs 51,180 crore in FY2024-25, based on Ministry of Finance data disclosed to the Rajya Sabha in December 2025.
- The government collected over Rs 60 crore through the 1% TDS on crypto transactions in the first seven months following the introduction of Section 194S on July 1, 2022, reflecting the high initial transaction volume on domestic exchanges, as reported through publicly available early-period TDS data.
- VDA income tax collected under Section 115BBH was Rs 269.09 crore in FY2022-23 and Rs 437.43 crore in FY2023-24, as confirmed by the Ministry of State for Finance in a Lok Sabha written response reported in 2025.
State-Wise TDS Collection Statistics
- Maharashtra collected Rs 293.40 crore in TDS on VDA transactions in FY2024-25, the highest of any Indian state, based on Ministry of Finance state-wise data disclosed to the Rajya Sabha in December 2025.
- Karnataka collected Rs 133.94 crore in TDS on VDA transactions in FY2024-25, a 63.4% year-on-year increase, based on Ministry of Finance data disclosed to the Rajya Sabha in December 2025.
- Gujarat collected Rs 28.63 crore in TDS on VDA transactions in FY2024-25, representing a 2.3% year-on-year decline, based on Ministry of Finance state-wise data disclosed to the Rajya Sabha in December 2025.
- Delhi’s TDS collections on VDA transactions surged from Rs 0.99 crore in FY2023-24 to Rs 28.33 crore in FY2024-25, based on Ministry of Finance data disclosed to the Rajya Sabha in December 2025.
- Rajasthan collected Rs 15.48 crore in TDS on VDA transactions in FY2024-25, while Tamil Nadu collected Rs 9.97 crore, based on Ministry of Finance state-wise data disclosed to the Rajya Sabha in December 2025.
- Maharashtra’s TDS collections from VDA transactions grew by 30.63% in FY2024-25 compared to the prior year, based on Ministry of Finance state-wise data disclosed to the Rajya Sabha in December 2025.
Trading Volume Impact of 1% TDS on Domestic Exchanges
- WazirX, India’s then-largest exchange by trading volume, saw a 63% drop in trading volume on the day Section 194S came into effect on July 1, 2022, as stated by WazirX Vice President Rajagopal Menon in contemporaneous reporting.
- Within the first three days of Section 194S taking effect on July 1, 2022, CoinDCX’s trading volume declined by approximately 90.9% and WazirX’s by approximately 82%, based on CoinGecko data cited in contemporaneous market analysis.
- Within ten days of the 30% profit tax taking effect on April 1, 2022, crypto trading volumes fell 72% on WazirX, 59% on ZebPay, 52% on CoinDCX, and 41% on BitBns, based on data collected by Crebaco and published by CoinDesk in April 2022.
- Indian VDA exchanges lost 97.1% of their trading volume in October 2022 compared to January 2022, while foreign exchanges lost only 36.3% of volume over the same period, based on research by the Esya Centre cited in its 2023 primary research reports.
- Total crypto trading volume across the top 4 Indian exchanges was $2.61 billion for January to May 2023, an 82.3% decline compared to the $14.78 billion recorded in the same period of 2022, based on CoinGecko’s 2023 India crypto exchange market study.
- The impact of the TDS provision on weekly active users, downloads, and web traffic on domestic exchanges was in the range of 44% to 74%, based on causal analysis conducted in the Esya Centre’s November 2023 primary research report on TDS impact.
- Web traffic from Indian users to major domestic exchanges including CoinDCX, CoinSwitch, WazirX, Mudrex, Giottus, Zebpay, and Bitbns declined by 34% from January to October 2024, based on the Esya Centre’s December 2024 special issue update on India’s VDA tax policy impact.
- Web traffic to the 9 blocked offshore crypto exchanges jumped 57% from January 2024 to October 2024, based on the Esya Centre’s December 2024 special issue update.
- Indian offshore platform activity increased by 77% from January to October 2024 as users used VPNs and mirror servers to circumvent access restrictions, based on the Esya Centre’s December 2024 special issue update.
- India’s estimated 72.7% of total crypto trading volume was offshore as of 2025, with traders migrating to foreign exchanges that operate outside India’s regulatory reach, based on commentary from Jaideep Reddy, Partner at Trilegal, published in The Crypto Times in April 2026.
Offshore Non-Compliance and Uncollected TDS Statistics
- Between July 2022 and July 2023, Indians traded VDAs worth over Rs 3.5 lakh crore (approximately $42 billion) on offshore platforms, accounting for more than 90% of their total VDA trading volume, based on the Esya Centre’s November 2023 primary research report analyzing transaction data from 13,000 P2P traders.
- Of the Rs 258 crore in TDS collected between July 2022 and October 2023, Rs 250 crore (97%) was paid by domestic Indian VDA exchanges, while only Rs 7 crore was collected from trades by Indians on offshore platforms, representing just 0.2% of the estimated Rs 3,500 crore that should have been collected from offshore activity, based on the Esya Centre’s November 2023 research report.
- Between December 2023 and October 2024, Indians traded over Rs 2.63 lakh crore (approximately $31.1 billion) on offshore platforms, corresponding to an estimated Rs 2,634 crore in TDS owed but not collected by those platforms, based on the Esya Centre’s December 2024 special issue update.
- Cumulative uncollected TDS from offshore platforms since July 2022 is estimated to have exceeded Rs 6,000 crore (approximately $724 million) by December 2024, based on the Esya Centre’s December 2024 special issue update on India’s VDA tax policy.
- If current trends persist, uncollected TDS from offshore crypto trading could surpass Rs 17,700 crore (approximately $2.1 billion) over the next five years, based on projections in the Esya Centre’s December 2024 special issue update on India’s VDA tax policy.
- KuCoin was the only FIU-registered foreign exchange to have begun deducting TDS in March 2024 through a local entity, but accounted for less than 5% of total offshore trading by Indians, based on the Esya Centre’s December 2024 report.
- In a modeled scenario where TDS is reduced to 0.01% and domestic platform asset share reverts to pre-February 2022 levels, an estimated 82% of Indian users would trade through domestic or compliant platforms, generating between Rs 9,169 crore and Rs 18,338 crore in tax revenue over five years, based on Esya Centre’s December 2024 special issue projections.
Enforcement Actions and Non-Compliance Statistics
- Targeted surveys of 3 crypto exchanges by the Income Tax Department exposed TDS violations worth Rs 39.8 crore and uncovered an additional Rs 125.79 crore in undisclosed income, as disclosed by the Ministry of Finance in a parliamentary response in December 2025.
- Broader search and survey operations across entities handling VDA transactions uncovered undisclosed income of Rs 888.82 crore, as disclosed by the Ministry of Finance to the Rajya Sabha in December 2025.
- FIU-India imposed a penalty of Rs 18.82 crore on Binance in June 2024 for PMLA violations, the largest crypto-related fine imposed in India to date, based on analysis of FIU enforcement actions published by Indiajuris in September 2025.
- FIU-India imposed a penalty of Rs 9.27 crore on Bybit Fintech Limited on January 31, 2025, under Section 13 of the PMLA for operating without mandatory FIU registration, based on FIU enforcement records referenced in the FY2024-25 annual report and Indiajuris analysis.
- FIU-India issued non-compliance notices to 25 offshore VDA Service Providers under Section 13 of the Prevention of Money Laundering Act in October 2024, with associated URL takedown notices issued under Section 79(3)(b) of the Information Technology Act, based on the official Press Information Bureau release.
- The Enforcement Directorate investigated crypto-related cases under the PMLA, seizing crime proceeds worth Rs 4,189.89 crore, arresting 29 individuals, and filing 22 prosecution complaints, with one accused declared a Fugitive Economic Offender, as disclosed by the Ministry of Finance in parliamentary responses in December 2025.
- The Income Tax Department issued NUDGE campaign communications to all taxpayers who did not report VDA-related transactions in their ITRs despite TDS being deducted, targeting discrepancies above Rs 1 lakh, based on the Ministry of State for Finance Rajya Sabha response in December 2025.
- The Ministry of Finance confirmed it has made no estimate of the potential revenue loss caused by under-reporting or misreporting of VDA transactions, as stated by the Minister of State for Finance in a Lok Sabha reply reported in July 2025.
FIU-India Registration and AML Compliance Statistics
- As of March 2025, 49 VDA Service Providers were registered with FIU-India as reporting entities under the PMLA, comprising 45 onshore (India-based) exchanges and 4 offshore platforms, based on the FIU-India FY2024-25 annual report.
- FIU-India imposed aggregate penalties of Rs 28 crore on non-compliant VDA Service Providers during FY2024-25, following risk-based remote and onsite inspections, based on the FIU-India FY2024-25 annual report.
- India’s GST authorities detected GST evasion of Rs 824.14 crore across 17 cryptocurrency exchanges, with Nest Services Ltd (Binance-linked) accounting for Rs 722.43 crore of the total, as disclosed in a December 2024 parliamentary response by the Minister of State for Finance.
- Indian authorities had recovered Rs 122.29 crore from cryptocurrency exchanges in taxes, penalties, and interest as of the December 2024 parliamentary disclosure, out of the Rs 824.14 crore in GST evasion detected.
- India ranks first globally in grassroots crypto adoption per Chainalysis data, with transaction volumes exceeding Rs 50,000 crore in FY2024-25, based on commentary published by Trilegal Partner Jaideep Reddy in The Crypto Times in April 2026.
Policy Framework and Regulatory Context Statistics
- Section 194S of the Income Tax Act mandates a 1% TDS on VDA transfers where the annual transaction value exceeds Rs 50,000 for non-specified persons and Rs 10,000 for specified persons, effective from July 1, 2022, as established under the Finance Act 2022.
- Non-payment of TDS under Section 194S carries a penalty equal to the unpaid TDS amount imposed by a joint commissioner, plus potential imprisonment for up to six months and interest of 15% per annum for late payment, as amended through Section 271C in the Finance Bill 2023.
- From FY2025-26 onward, unreported crypto holdings discovered during a tax search may be taxed under the block assessment framework at 60% plus surcharge and cess under Section 158B as undisclosed income, as introduced in the Union Budget 2025 effective from February 1, 2025.
- The Income Tax Department uses Project Insight, the Non-Filer Monitoring System, and internal analytics to cross-reference TDS returns filed by VASPs against individual ITR disclosures, identifying discrepancies for follow-up, as confirmed in Ministry of Finance parliamentary responses in 2025.
- A CBDT amendment in March 2026 brought crypto assets, CBDCs, and specified electronic money products under Rules 114F, 114G, and 114H of the Income Tax Act, aligning India’s reporting framework with the OECD’s Crypto-Asset Reporting Framework multilateral movement, based on reporting from The Crypto Times in April 2026.
- Penalties introduced in Budget 2026 for crypto reporting failures include Rs 200 per day for failure to report and Rs 50,000 for incorrect reporting, based on The Crypto Times analysis of the Budget 2026-27 provisions published in April 2026.
References
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