Crypto TDS Surges 41% in FY 2024-25; Maharashtra and Karnataka Lead Collections
By Rajeev Jayaswal, New Delhi | Dec 26, 2025, 06:36 AM IST
Tax deducted at source (TDS) collections from virtual digital assets (VDAs), including cryptocurrencies, saw a significant increase of over 41% during the fiscal year 2024-25 compared to the previous year. Maharashtra and Karnataka emerged as the leading contributors, according to the latest data released by India’s Finance Ministry.
Maharashtra Tops Crypto TDS Collections
Crypto exchanges based in Maharashtra accounted for the highest TDS collections, totaling ₹293.40 crore in FY25. This was followed by Karnataka with ₹133.94 crore and Gujarat with ₹28.63 crore. Delhi secured the fourth position, with TDS collections rising sharply from ₹0.99 crore in FY24 to ₹28.33 crore in FY25. It is important to note that these figures reflect the TDS collected at the locations where crypto exchanges are registered, rather than the geographic locations of individual trades or users.
Growth and Variations Across States
Overall, the government collected ₹511.83 crore in TDS from cryptocurrency and other VDA transactions in FY25, up from ₹362.70 crore in FY24, marking a robust growth of over 41%. Maharashtra’s collections increased by approximately 30.6%, while Karnataka experienced an impressive 63.4% surge. Conversely, Gujarat saw a slight decline of 2.3% in TDS collections year-on-year.
Other states such as Rajasthan and Tamil Nadu contributed ₹15.48 crore and ₹9.97 crore respectively. TDS amounts reported from most other states were either minimal (under ₹1 crore) or negligible.
Background: Tax Regime on Virtual Digital Assets
The government introduced mandatory TDS on cryptocurrency transactions starting July 1, 2022, as part of the Union Budget 2022-23 reforms. A 1% TDS is levied on transfers of VDAs to ensure transparency and tracking of digital asset transactions. In addition to TDS, a 30% tax on income from the transfer of any VDA was imposed to regulate the booming virtual assets market.
Union Finance Minister Nirmala Sitharaman stated during the 2022 budget presentation that the rapid growth and frequency of digital asset transactions warranted a distinct tax regime aimed at capturing detailed transaction records.
Compliance and Regulatory Measures
Domestic Virtual Asset Service Providers (VASPs) have largely adhered to the TDS requirements. However, overseas platforms servicing Indian clients are under scrutiny for possible non-compliance, according to an official familiar with the matter.
As of November 2025, a total of 47 VASPs are registered with the Financial Intelligence Unit – India (FIU-IND), the government agency responsible for monitoring suspect financial activities to prevent money laundering and terrorism financing.
Additionally, authorities have taken strict actions against nearly 18 cryptocurrency exchanges for evading Goods and Services Tax (GST) obligations amounting to over ₹824 crore. The Central Board of Direct Taxes (CBDT) also launched the NUDGE campaign, issuing more than 44,000 communications to individuals who conducted VDA transactions but failed to declare them in their income tax returns.
Regulatory Framework and Oversight
Despite the absence of formal regulation on cryptocurrencies in India, the Prevention of Money Laundering Act (PMLA) endows FIU-IND with the authority to register and monitor VASPs. Both Indian and foreign platforms serving Indian users are mandated to register with FIU-IND to curb illicit financial flows.
FIU-IND, established in 2004 under the Finance Ministry, plays a pivotal role in analyzing and disseminating intelligence related to suspicious financial transactions.
Summary: The Indian government’s TDS collections on digital asset transactions surged by over 41% in FY 2024-25, with Maharashtra and Karnataka leading in collections. This growth underscores heightened cryptocurrency trading activities and strengthened tax compliance under the government’s specific VDA taxation framework implemented since 2022.