Crypto Tax in India: Complete Guide (2026)
Contents
- India Crypto Tax Rates at a Glance
- 30% Tax on VDA Transfers (Section 115BBH)
- 1% TDS on Crypto Transactions (Section 194S)
- 18% GST on Exchange Fees
- How to Declare Crypto Income: Schedule VDA
- Tax Calculator: How to Calculate Your Liability
- Minimum Crypto Amount Subject to Tax
- Budget 2026 — Latest Updates
- Key Filing Deadlines
- Practical Checklist for Indian Crypto Traders
- Frequently Asked Questions
India Crypto Tax Rates at a Glance (2026)
Three separate taxes apply to crypto activity in India. All are in force as of FY 2025-26.
30% Flat Tax on VDA Transfers — Section 115BBH
The Finance Act 2022 introduced Section 115BBH of the Income Tax Act, imposing a flat 30% tax on income from the transfer of any Virtual Digital Asset (VDA). The provision applies from Assessment Year 2023-24 (i.e., income earned from 1 April 2022 onwards).
What counts as a VDA under Section 115BBH?
Section 2(47A) of the Income Tax Act defines a Virtual Digital Asset broadly to include:
- Any information, code, number, or token generated through cryptographic means (cryptocurrencies such as Bitcoin, Ethereum, etc.)
- Non-Fungible Tokens (NFTs)
- Any other digital asset notified by the Central Government
The definition explicitly excludes gift cards, mileage points, subscriptions, and foreign currency. Indian Rupee (INR) and foreign fiat currencies are not VDAs.
Key rules under Section 115BBH
| Rule | Details |
|---|---|
| Tax rate | 30% flat on profit (transfer price minus cost of acquisition). Plus applicable surcharge and 4% Health & Education Cess. Effective combined rate for many taxpayers: ~31.2%. |
| No loss set-off | Losses from one VDA cannot be set off against gains from another VDA. Losses also cannot be set off against any other income head (salary, business, capital gains, etc.). |
| No carry-forward | VDA losses cannot be carried forward to subsequent financial years under the current statutory framework (as of FY 2025-26). |
| Cost of acquisition | Only the documented purchase price may be deducted. No deduction for mining costs, transfer costs, or other expenses — only cost of acquisition is allowable. |
| No indexation | Indexation benefit does not apply to VDAs regardless of holding period. The 30% rate applies whether you held for 1 day or 10 years. |
| Gifts of VDA | VDAs received as gifts may be taxable in the recipient's hands under Section 56(2)(x) if the aggregate fair market value exceeds ₹50,000 from non-relatives. Consult a CA for specifics. |
1% TDS on Crypto Transactions — Section 194S
Section 194S of the Income Tax Act (effective 1 July 2022) requires Tax Deducted at Source at 1% on the value of any VDA transfer. The deduction is made by the exchange (in exchange-facilitated transactions) or by the buyer (in peer-to-peer transactions). CBDT Circular No. 13 of 2022 provides the operational guidelines.
TDS thresholds (per CBDT Circular 13/2022)
| Taxpayer category | Annual threshold | TDS rate above threshold |
|---|---|---|
| Specified persons (individuals/HUF with business/professional income ≤₹1Cr or ≤₹50L) | ₹50,000 per financial year | 1% on the full transaction value |
| Others (all other buyers/transferors) | ₹10,000 per financial year | 1% on the full transaction value |
How TDS works in practice
- On exchanges (e.g., CoinDCX, WazirX, Bybit, etc.): The exchange deducts 1% TDS before crediting your proceeds. You will see this as a deduction on your trade statement. The exchange deposits this to the government and provides you a Form 26AS credit.
- Peer-to-peer (P2P) transactions: The buyer is responsible for deducting and depositing TDS. This is often overlooked in informal P2P crypto trades — both parties carry compliance risk.
- Claiming TDS credit: TDS deducted is advance tax — it reduces your final income tax payable. Claim it in your ITR. If TDS exceeds your total tax liability, you can claim a refund.
- No PAN provided: If PAN is not provided, TDS rate rises to 20% under Section 206AA.
18% GST on Crypto Exchange Fees
Since 7 July 2025, following a GST Council clarification, crypto exchanges operating in India must charge 18% GST on their service fees — including trading commissions, platform fees, and related charges. This applies to the fee amount itself, not to the value of the crypto transaction.
GST practical example
GST on Exchange Fee — Example
How to Declare Crypto Income: Schedule VDA in ITR
From Assessment Year 2023-24 (i.e., FY 2022-23 onwards), the Income Tax Department introduced Schedule VDA in ITR-2 and ITR-3 to capture crypto income. All VDA transactions during the financial year must be individually reported here.
Which ITR form to use?
| Your income profile | ITR form | Where to report crypto |
|---|---|---|
| Salaried + crypto gains (no business income) | ITR-2 | Schedule VDA within ITR-2 |
| Business/professional income + crypto gains | ITR-3 | Schedule VDA within ITR-3 |
| Salary only, no crypto | ITR-1 (Sahaj) | N/A — add crypto gains, switch to ITR-2 |
| Presumptive business income only | ITR-4 (Sugam) | Cannot use ITR-4 if crypto income exists — switch to ITR-3 |
What to enter in Schedule VDA
For each VDA transaction (each buy-sell pair or transfer), you must record:
- Date of acquisition of the VDA
- Date of transfer (sale)
- Head of income under which reported (Section 115BBH)
- Cost of acquisition (purchase price in INR)
- Sale consideration received (in INR)
- Resulting profit or loss
Crypto Tax Calculator: How to Calculate Your Liability
India's crypto tax system is mathematically straightforward. Here is the step-by-step calculation for a typical trade scenario.
Tax Calculation Example — Bitcoin Trade
Formula summary
Key formulas
- Income tax: (Sale price − Cost of acquisition) × 30%
- Cess: Income tax amount × 4%
- TDS (deducted by exchange): Sale consideration × 1%
- GST on fee: Exchange trading fee × 18%
- Net payable: (Income tax + Cess) − TDS credit
If you traded on multiple exchanges, aggregate all VDA gains across the year before computing tax. A loss on one trade does not reduce the tax on a profitable trade under current rules.
Minimum Crypto Amount Subject to Tax in India
This is a frequently misunderstood area. Here is what the law says and where the uncertainty lies.
Basic exemption limit vs. VDA flat rate
- The basic income tax exemption is ₹2.5 lakh (old tax regime) or ₹3 lakh (new tax regime) for FY 2025-26 for resident individuals under 60.
- Section 115BBH applies a flat 30% on VDA profits. The interaction between this flat rate and the basic exemption is not explicitly settled by CBDT as of the review date.
- Conservative interpretation (and the position taken by most CAs): if your total income (including VDA profits) is below the basic exemption limit, no income tax is payable. The basic exemption effectively absorbs small crypto gains.
- However, some tax practitioners argue that the special flat rate under 115BBH applies even below the exemption limit — similar to STCG/LTCG special rates. The Income Tax Department has not issued a clarifying circular specifically for this edge case.
- Safe approach: Declare all VDA income in Schedule VDA regardless of amount. Let your CA determine net tax payable based on your total income profile.
Budget 2026 — What Has Changed (and What Hasn't)
Budget 2025-26 status (confirmed)
As of Budget 2025-26 (presented February 2025), the core crypto tax framework remains unchanged:
- 30% flat tax on VDA gains — No change
- 1% TDS on VDA transfers — No change
- No loss set-off or carry-forward — No change
- Schedule VDA mandatory declaration — Maintained
The industry had lobbied for a reduction in the TDS rate from 1% to 0.01% and for the restoration of loss set-off provisions. Neither was granted in the 2025-26 Budget.
Budget 2026-27 — What to watch
As of Budget 2025-26, the 30% rate and 1% TDS remain unchanged. Monitor the Union Budget 2026-27 (expected February 2026) for any updates. Key watch items based on industry lobbying:
- TDS rate reduction (industry seeks 0.01% or removal)
- Loss set-off restoration (ability to offset BTC loss against ETH gain)
- Carry-forward of VDA losses
- GST framework for DeFi and NFTs
Check incometaxindia.gov.in and the official Union Budget documentation for confirmed announcements. Do not rely on speculative news sources for tax planning.
Key Tax Deadlines for Indian Crypto Traders
| Deadline | Date (FY 2025-26 / AY 2026-27) | What to do |
|---|---|---|
| Advance tax: 1st instalment | 15 June 2025 | Pay 15% of estimated annual tax if total tax liability exceeds ₹10,000 |
| Advance tax: 2nd instalment | 15 September 2025 | Cumulative 45% of estimated annual tax |
| Advance tax: 3rd instalment | 15 December 2025 | Cumulative 75% of estimated annual tax |
| Advance tax: 4th instalment | 15 March 2026 | Cumulative 100% of estimated annual tax |
| Financial year ends | 31 March 2026 | Download trade history CSVs from all exchanges; finalise records |
| ITR filing (non-audit) | 31 July 2026 | File ITR-2 or ITR-3 with Schedule VDA completed for all crypto transactions |
| ITR filing (audit cases) | 31 October 2026 | File ITR with tax audit report if applicable |
| Belated / revised ITR | 31 December 2026 | Last date to file belated or revised return for AY 2026-27; penalty of ₹5,000 applies (₹1,000 if total income ≤₹5 lakh) |
Practical Checklist for Indian Crypto Traders
Follow these steps each financial year to stay compliant.
-
1
Enable KYC on all exchanges. Complete PAN + Aadhaar KYC on every exchange you use. Without KYC, TDS is deducted at 20% under Section 206AA instead of 1%. Use only FIU-IND registered exchanges to ensure TDS is handled correctly on your behalf. See our Best Crypto Exchanges in India guide for FIU-registered options.
-
2
Download trade history at year-end. Export a full CSV of all trades from every exchange before and after 31 March. Include: trade date, asset pair, buy/sell direction, quantity, price in INR, and fees. Store these records for at least 6 years (standard IT assessment period).
-
3
Calculate profit for each trade individually. Identify your cost of acquisition (purchase price in INR) for each crypto unit sold. Profit = sale consideration − cost of acquisition. Do not net profits against losses across different assets.
-
4
Track TDS deducted. Check Form 26AS on the Income Tax portal after each financial year closes. All TDS deducted by exchanges under Section 194S should appear here. Reconcile against your trade statements. Discrepancies should be raised with the exchange.
-
5
Pay advance tax if needed. If your estimated crypto profit for the year will generate more than ₹10,000 in tax, pay advance tax quarterly (15 June, 15 September, 15 December, 15 March). Use the Income Tax e-filing portal (incometaxindia.gov.in) for payment via Challan 280.
-
6
Select the correct ITR form. Salaried individuals with only crypto income use ITR-2. Those with business income use ITR-3. You cannot use ITR-1 or ITR-4 if you have any VDA income.
-
7
Complete Schedule VDA meticulously. Enter each VDA transaction individually. The schedule requires date of acquisition, date of sale, cost of acquisition, and sale consideration. Do not aggregate or round off entries — each trade must be itemised.
-
8
Claim TDS credit in your ITR. TDS deducted by exchanges appears in Schedule TDS/TCS in your ITR. Cross-check against Form 26AS. Claim credit to offset against final tax payable, or to obtain a refund if TDS exceeds your liability.
-
9
File by 31 July (non-audit). File your ITR before 31 July of the assessment year to avoid late-filing fees and interest. E-verify your return within 30 days of filing using Aadhaar OTP, net banking, or Digital Signature Certificate.
-
10
Consult a Chartered Accountant. The interaction of 115BBH with the basic exemption, surcharge calculations, and complex scenarios (airdrops, DeFi, P2P) is not always straightforward. A qualified CA with crypto experience can help you minimise errors and reduce the risk of an IT notice.
Frequently Asked Questions
Can I avoid the 30% crypto tax in India?
No. The 30% flat tax rate on VDA gains under Section 115BBH is a statutory obligation since Finance Act 2022. It applies regardless of your income slab, holding period, or losses on other crypto assets. The only lawful deduction is the documented cost of acquisition. You cannot offset a Bitcoin loss against an Ethereum gain, and you cannot carry forward VDA losses to future years under current rules. The safest approach is accurate record-keeping and timely filing. Consult a Chartered Accountant for individual tax planning within the law.
What is the 1% TDS on crypto in India and how is it deducted?
Under Section 194S (effective 1 July 2022), a 1% TDS is deducted on VDA transfers above ₹10,000 per financial year (₹50,000 for specified persons, per CBDT Circular 13/2022). On FIU-registered exchanges like CoinDCX, Bybit, WazirX, and others, the exchange automatically deducts TDS from your proceeds and deposits it with the government. This appears in your Form 26AS. TDS is advance tax — it is credited against your final income tax liability when you file your ITR. If TDS exceeds your tax payable, you can claim a refund.
When do I file my crypto tax return in India?
For most individual traders (non-audit cases), the ITR filing deadline is 31 July of the relevant Assessment Year. For FY 2025-26 income, the deadline is 31 July 2026. If you are subject to a tax audit (typically applies to those with business turnover above certain thresholds), the deadline is 31 October. File using ITR-2 or ITR-3, completing Schedule VDA with all crypto transactions. E-verify within 30 days of filing. Belated returns can be filed up to 31 December with a late fee.
What is GST on crypto in India and does it affect my tax?
Since 7 July 2025, Indian crypto exchanges charge 18% GST on their service fees (trading commissions, platform charges). This applies to the fee amount — not to the crypto transaction value itself. For example, on a ₹100 trading fee, the exchange adds ₹18 GST, totalling ₹118. This GST is not deductible against your income tax on VDA profits (since trading expenses are not allowable deductions under 115BBH). GST is entirely separate from the 30% income tax on your profits.
Where do I declare crypto income in my ITR?
From Assessment Year 2023-24 onwards, all VDA income must be declared in Schedule VDA within ITR-2 (for salaried individuals without business income) or ITR-3 (for those with business income). You must itemise each transaction with the date of acquisition, date of transfer, cost of acquisition, and sale consideration. VDA income cannot be reported in ITR-1 or ITR-4. Failure to declare crypto income in Schedule VDA is a compliance risk and can result in notices or penalties from the Income Tax Department.
What is the minimum crypto profit that is taxable in India?
The 30% flat tax under Section 115BBH applies to any profit from a VDA transfer. However, income tax becomes payable only when your total taxable income exceeds the basic exemption limit — ₹2.5 lakh (old regime) or ₹3 lakh (new regime) for resident individuals under 60, for FY 2025-26. The precise interaction between the basic exemption and the 115BBH flat rate is debated among tax professionals; CBDT has not issued a definitive clarification. The safest approach is to declare all VDA income in Schedule VDA regardless of amount, and consult a CA to determine your net tax payable. Note that TDS is deducted on transactions above ₹10,000 per FY even if your total income is below the exemption limit — you can reclaim it as a refund if no tax is ultimately due.
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Not tax advice. This guide is for educational and informational purposes only. It does not constitute tax or legal advice. Crypto tax law in India is complex and evolving. Always consult a qualified Chartered Accountant (CA) for advice specific to your individual situation.