Government Earns ₹1,100 Crore from Crypto TDS in Three Years; Maharashtra Leads with 60% Share

Whether or not investors are making profits from cryptocurrency, the government certainly is. The Finance Ministry informed the Lok Sabha that crypto exchanges have collected nearly ₹1,100 crore as Tax Deducted at Source (TDS) from users over the last three financial years. Surprisingly, 60% of this revenue came from a single state — Maharashtra.

According to Minister of State for Finance Pankaj Chaudhary, crypto exchanges deducted ₹221.27 crore in FY 2022-23, ₹362.70 crore in FY 2023-24, and ₹511.83 crore in FY 2024-25, totalling ₹1,096 crore. The information was shared in response to questions raised by MPs Pulla Mahesh Kumar and Magunta Srinivasulu Reddy.

Maharashtra Tops Crypto TDS Collection

Finance Ministry data reveals that Maharashtra remains far ahead of all other states in crypto-related TDS collection.
Exchanges operating in the state collected:

• ₹142.83 crore in FY 2022-23
• ₹224.60 crore in FY 2023-24
• ₹293.40 crore in FY 2024-25

This totals ₹661 crore, accounting for over 60% of the national TDS collection from crypto transactions.

How Exchanges Deduct TDS from Crypto Users

Minister Chaudhary explained that under the Finance Act 2022, Section 194S was added to the Income Tax Act, mandating 1% TDS on the transfer of Virtual Digital Assets (VDAs) — including all forms of cryptocurrency.

This TDS applies to all transactions, even if conducted on a foreign platform, as long as the gains are taxable in India.

To prevent money laundering and illegal financial activities, the Financial Intelligence Unit (FIU-IND) also requires all Virtual Asset Service Providers (VASPs) — Indian or foreign — to register under the Prevention of Money Laundering Act (PMLA).

Action Taken Against Exchanges for TDS Violations

Responding to queries on TDS non-compliance, the minister said that the Income Tax Department conducted surveys under Section 133A on three crypto exchanges. These probes found ₹39.8 crore worth of transactions where TDS was not deducted as required under Section 194S.

Additionally, the surveys unearthed ₹125.79 crore in undeclared income linked to cryptocurrency operations.

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