The Indian tax authorities are intensifying their scrutiny of cryptocurrency transactions, focusing on digital trails left behind by investors and traders. With rising adoption of virtual digital assets (VDAs), the Income Tax Department is now using advanced data analytics and AI tools to flag suspicious or undisclosed crypto activity. Sources say tax officials are examining wallet addresses, exchange records, and blockchain transactions to identify tax evasion. This move comes amid concerns that many crypto users are not reporting gains or adhering to tax deduction norms under the updated VDA tax regime.