Crypto Tax in India: Complete Guide to Tax Rules & Filing (2026)

Crypto tax in India includes a flat 30% tax on income from the transfer of virtual digital assets, plus applicable surcharge and 4% cess. A 1% Tax Deducted at Source or TDS also applies to the transaction consideration once the applicable annual threshold is crossed.

The crypto tax rules in India cover selling crypto for INR, swapping one token for another and using crypto to pay for goods or services. Taxpayers must disclose taxable transactions under Schedule VDA in the applicable Income Tax Return or ITR. New exchange-level reporting rules have also increased the importance of keeping transaction, TDS and wallet records consistent.

This crypto tax India guide explains the 30% tax on crypto gains, the 1% TDS rule, loss treatment, Schedule VDA filing and how to calculate crypto tax in India for the 2025–26 financial year.

Key Takeaways

• Income from transferring crypto and other VDAs is taxed at 30%, plus applicable surcharge and 4% cess.
• Only the cost of acquisition is generally allowed as a deduction while calculating VDA income.
• Loss from one VDA transfer cannot be set off against income from another VDA or any other income. It also cannot be carried forward.
• A 1% TDS applies to the transfer consideration after the annual threshold is crossed: ₹50,000 for a specified person and ₹10,000 for others.
• Selling crypto for INR, crypto-to-crypto swaps and spending crypto can all be taxable transfers.
• Taxpayers must report taxable transactions in Schedule VDA. Exchange reports and TDS statements do not replace the taxpayer’s filing responsibility.
• Buying and holding crypto without transferring it does not create tax on unrealised gains.

Is Crypto Taxed in India?

Yes. Income from the transfer of a virtual digital asset is taxed at a special rate of 30% under the VDA tax framework introduced through Section 115BBH of the Income-tax Act, 1961. The 30% rate applies irrespective of the taxpayer’s normal income-tax slab or how long the asset was held.

The Income-tax Act, 2025, which came into force from Apr 1, 2026, continues the special tax treatment for VDA income. The underlying rules remain the same: income from a VDA transfer is taxed at 30%, only the cost of acquisition is generally deductible, and VDA losses cannot be set off or carried forward.

The 30% rate is charged on taxable income or gain, not on the entire sale value. Surcharge, if applicable, and 4% health and education cess are added to the calculated tax. Taxing crypto does not make it legal tender. The Indian rupee remains India’s legal tender, while crypto assets are treated as VDAs for tax and specified compliance purposes.

What Are Virtual Digital Assets?

Virtual digital assets are digitally represented assets covered by the definition under Indian income-tax law. The category can include:

• crypto assets such as Bitcoin and Ethereum;
• crypto tokens and certain utility or governance tokens;
• stablecoins;
• non-fungible tokens covered by the notified VDA definition; and
• other cryptographically secured digital representations of value covered by the law.

The Reserve Bank of India’s central bank digital currency, or digital rupee, is not treated in the same way as a privately issued crypto asset for VDA taxation.

Crypto Tax Rates in India for 2026

30% Tax on Crypto Income

Income from the transfer of a VDA is taxed at 30%. Applicable surcharge and 4% cess may increase the final liability. While calculating taxable VDA income, the law generally permits the cost of acquisition to be deducted from the transfer consideration. Other expenditure or allowances are not generally deductible under the special VDA provision.

1% TDS on Crypto Transfers

A 1% TDS applies to the consideration paid for transferring a VDA after the applicable annual threshold is crossed. TDS is calculated on the transaction consideration, not on profit. The annual thresholds are:

• ₹50,000 when the buyer is a “specified person” under the TDS provision; and
• ₹10,000 in other cases.

A specified person generally includes an individual or Hindu Undivided Family whose business or professional turnover does not cross the prescribed limits, or who does not have income under profits and gains of business or profession. TDS is not an additional 1% final tax on top of the 30% tax. It is an advance tax credit. The amount should appear in the taxpayer’s Form 26AS or Annual Information Statement and can be claimed while filing the return.

GST on Exchange Fees

GST may apply to trading fees, brokerage or other services charged by a crypto exchange. GST on a platform’s service fee is separate from the 30% income tax on VDA income and the 1% TDS on eligible transfers. Avoid treating a platform-specific billing change as a new nationwide crypto-income-tax rule. Users should check the fee and GST breakup shown by their exchange.

When Do You Pay Crypto Tax in India?

Selling Crypto for INR

Selling crypto for INR is a transfer. If the selling price exceeds the allowable cost of acquisition, the resulting income is taxed at 30%, plus applicable surcharge and cess. TDS may also be deducted from the sale consideration after the threshold is crossed.

Swapping One Crypto for Another

A crypto-to-crypto swap is also treated as a transfer. For example, exchanging Bitcoin for USDT or Ethereum for another token can create taxable VDA income even when no INR is withdrawn to a bank account. The fair market value of the assets at the time of the transaction is relevant for calculating the transfer value. Crypto-to-crypto transactions can also create TDS obligations, including special compliance where consideration is wholly or partly in kind. When an exchange facilitates the transaction, it may handle the applicable TDS mechanism.

Spending Crypto on Goods or Services

Using crypto to buy a product or service involves transferring the VDA. Any taxable income arising between acquisition and spending can attract the 30% tax.

Buying and Holding Crypto

Buying crypto with INR does not by itself create taxable VDA income for the buyer. Holding crypto without selling, swapping, gifting or spending it also does not create tax merely because its market price has increased. Tax generally arises when a taxable transfer occurs.

Moving Crypto Between Your Own Wallets

Moving crypto between wallets that you own does not ordinarily change beneficial ownership and therefore should not by itself create VDA income. Keep transaction hashes and wallet records to demonstrate that both wallets belong to you, especially when moving assets between an exchange and a self-custody wallet.

Receiving Crypto as a Gift

Crypto received without consideration may be taxable in the recipient’s hands when the fair market value crosses the applicable gift-tax threshold, subject to exemptions such as gifts from specified relatives or on certain occasions. A later sale or swap can create separate VDA income under the 30% transfer-tax rule. Because the treatment depends on the relationship between the parties, valuation and the nature of the receipt, gift transactions should be reviewed carefully instead of assuming that every receipt is automatically taxed at a flat 30%.

Airdrops, Mining and Staking Rewards

Crypto received through an airdrop, mining or staking can have tax implications at receipt and again when the asset is subsequently transferred. The tax head and valuation can depend on whether the activity is occasional, professional or part of a business. The later sale or swap of the received VDA can fall under the special 30% transfer-tax framework. Since the treatment of acquisition cost and receipt-stage income can be fact-specific, taxpayers with material airdrop, mining, staking or DeFi income should obtain professional advice.

Crypto Futures and Derivatives

The tax treatment of crypto derivatives can differ from direct ownership and transfer of a VDA, depending on the product structure and settlement method. Do not automatically apply the spot-crypto calculation to every futures or derivatives transaction.

Also read: How Are Crypto Futures Taxed in India?

How Is the 30% Crypto Tax Calculated?

The basic calculation is: Taxable VDA income = Transfer consideration − Cost of acquisition

Base crypto tax = Taxable VDA income × 30%

Applicable surcharge and 4% cess are added after calculating the base tax.

Crypto Tax Calculation Example

Assume an investor purchases Bitcoin for ₹1,00,000 and later sells it for ₹1,50,000.

• Sale consideration: ₹1,50,000
• Cost of acquisition: ₹1,00,000
• Taxable VDA income: ₹50,000
• Tax at 30%: ₹15,000
• Health and education cess at 4%: ₹600
• Total tax on the VDA income: ₹15,600, excluding any applicable surcharge

If 1% TDS of ₹1,500 was deducted from the ₹1,50,000 sale consideration, the taxpayer can claim that ₹1,500 as tax credit. It does not reduce the ₹50,000 taxable income. Subject to the taxpayer’s overall return and other credits, the remaining tax attributable to this example would be ₹14,100.

For a quick estimate, use the CoinDCX Crypto Tax Calculator. A calculator can assist with estimates, but taxpayers should reconcile the result with complete transaction records before filing.

Can Crypto Losses Be Set Off in India?

No. A loss from the transfer of a VDA cannot be set off against other income. It also cannot be carried forward to future years. The restriction is applied transaction-wise in Schedule VDA. This means a loss on one crypto asset cannot be netted against a profit on another crypto asset.

Crypto Loss Set-Off Example

Suppose a taxpayer has the following transactions:

• Bitcoin bought for ₹5,00,000 and sold for ₹6,00,000: profit of ₹1,00,000
• Ethereum bought for ₹2,00,000 and sold for ₹1,50,000: loss of ₹50,000

The ₹50,000 Ethereum loss cannot be adjusted against the ₹1,00,000 Bitcoin profit. The taxable VDA income remains ₹1,00,000. The base tax would be ₹30,000, plus applicable surcharge and 4% cess. The Ethereum loss cannot be carried forward. This restriction is one of the most important differences between crypto taxation and the treatment of many traditional investments.

What Is 1% TDS on Crypto?

TDS under the VDA provision is designed to create a transaction trail and improve reporting. It is generally deducted at the time of credit or payment, whichever is earlier. Important points include:

• TDS is calculated on the transfer consideration, not on the gain.
• TDS may apply even when the seller makes a loss.
• The ₹50,000 or ₹10,000 test is an annual aggregate threshold, depending on the buyer’s category.
• TDS deducted through an exchange should be checked against Form 26AS and the Annual Information Statement.
• Excess TDS can be claimed as a refund when the final tax liability is lower, subject to the return being filed correctly.

On an Indian exchange, the platform generally facilitates TDS compliance for eligible transactions. In peer-to-peer, off-exchange or in-kind transactions, the buyer and seller may need to examine their own deduction and deposit responsibilities.

Does CoinDCX Deduct 30% Crypto Tax?

No. CoinDCX does not deduct the final 30% income tax on a user’s crypto gains. The 30% tax is calculated as part of the taxpayer’s overall income-tax liability and is paid through the applicable advance-tax, self-assessment-tax and ITR process. CoinDCX may deduct the applicable 1% TDS on eligible transactions. Users should download their transaction and tax reports, compare the TDS with Form 26AS or AIS and calculate the final VDA income before filing.

How to File Crypto Tax in India Using Schedule VDA

Taxable crypto and NFT transactions must be disclosed in Schedule VDA of the applicable ITR. The Income Tax Department provides Schedule VDA in ITR-2 and ITR-3.

ITR-2 is generally used when VDA income is reported as capital gains and the taxpayer does not have business or professional income. ITR-3 may be required when crypto activity is reported as business income. The correct classification depends on the nature, scale and frequency of the activity.

Step 1: Collect Your Crypto Records

Download records from every exchange and wallet used during the financial year. Include:

• buy and sell history;
• crypto-to-crypto swaps;
• deposits and withdrawals;
• wallet transfers;
• airdrops, rewards and gifts;
• TDS statements; and
• fees and INR payment records.

Do not rely only on the current portfolio balance. Schedule VDA requires details of transfers that occurred during the year.

Step 2: Reconcile TDS

Compare exchange TDS reports with Form 26AS and AIS. Investigate missing, duplicated or mismatched entries before filing. TDS is deducted on consideration, while income tax is calculated on taxable VDA income. Therefore, the TDS number and the final 30% tax will usually not be the same.

Step 3: Calculate Each VDA Transaction

Calculate the transfer consideration, allowable cost of acquisition and resulting income for each transaction. Loss-making VDA transactions should still be recorded correctly even though the loss cannot be set off or carried forward. For crypto-to-crypto trades, convert the relevant value into INR using a consistent and supportable valuation at the time of the transaction.

Step 4: Select the Correct ITR

Choose ITR-2 or ITR-3 based on whether the activity is being reported as capital gains or business income and whether the taxpayer has other business or professional income.

Step 5: Complete Schedule VDA

Enter the required transaction-wise details, including the acquisition date, transfer date, category of income, acquisition cost, transfer consideration and taxable income.

Step 6: Claim TDS Credit and Pay the Balance

Claim eligible TDS credit appearing in the tax records. Pay any remaining advance tax, self-assessment tax, interest or other liability applicable to the return.

Step 7: Verify and Retain Records

Verify the ITR within the prescribed time and retain exchange statements, wallet evidence, transaction hashes and calculation workings.

For a detailed walkthrough, read How Do You Report Crypto Taxes in India?

New Crypto Exchange Reporting Rules in 2026

The Income-tax Rules, 2026 introduce structured reporting and due-diligence obligations for Reporting Crypto-Asset Service Providers (RCASPs). Depending on their connection with India and the services they provide, the definition can cover exchanges, brokers, market makers, trading platforms and crypto ATM operators. The rules apply to relevant calendar years beginning on or after Jan 1, 2026. Covered providers must file Form 167 by 31 May of the following calendar year.

The reporting framework includes prescribed information about reportable users and certain controlling persons. Under Rule 241, a reportable person is generally an individual or entity resident for tax purposes outside India, subject to specified exclusions. Therefore, Form 167 should not be described as blanket CARF reporting of every Indian-resident user.

Depending on the transaction, the prescribed information can include aggregated:

• purchases and sales against fiat currency;
• crypto-to-crypto acquisitions and disposals;
• transfers into and out of accounts;
• qualifying retail payments for goods or services; and
• transfers to wallet addresses not known to be associated with a virtual asset service provider or financial institution.

The due-diligence rules require tax-residency self-certification and checks against KYC and anti-money-laundering information. Providers must also retain specified records, including certain external wallet information, for the prescribed period. These rules do not replace an Indian taxpayer’s Schedule VDA filing obligation. Users should continue to maintain their own records and ensure that tax-residency, KYC and transaction information supplied to platforms is accurate.

The framework is compatible with the OECD Crypto-Asset Reporting Framework, but users should not assume a fixed international data-exchange date unless India formally announces the relevant commitment, partner jurisdictions and activated exchange arrangements.

Crypto Tax Evolution (2022–2026)

Common Crypto Tax Filing Mistakes

• Reporting Only INR Withdrawals: Crypto-to-crypto swaps can be taxable even when no money is withdrawn to a bank account. Report taxable transfers, not merely INR withdrawals.
• Treating TDS as the Final Tax: The 1% TDS is a tax credit. It does not replace the 30% tax calculation on VDA income.
• Netting Profits and Losses: Do not reduce the profit on one VDA transfer by the loss on another. VDA losses cannot be set off or carried forward.
• Ignoring Foreign Exchanges or Self-Custody Wallets: Using an offshore exchange or self-custody wallet does not remove the Indian taxpayer’s reporting obligation. Overseas holdings or income may also create separate foreign-asset or foreign-income disclosure questions.
• Using Incomplete Exchange Data: One exchange report may not capture purchases made elsewhere, wallet transfers or assets moved between platforms. Consolidate records from all exchanges and wallets.
• Using an Outdated ITR Form or Deadline: ITR forms, utilities and due dates can change by assessment year. Use the form and deadline published by the Income Tax Department for the return being filed instead of retaining an old date in an evergreen crypto tax guide.

Also read: How to save tax on crypto in India

Things Investors Should Note:

Conclusion

Understanding the guidelines and regulations surrounding crypto tax in India is crucial. This Crypto Tax Guide emphasizes knowing tax rates, reporting requirements, and potential penalties for different crypto transactions. Compliance with TDS obligations and timely filing of IT is essential. Stay informed, seek expert advice, and use resources from platforms like CoinDCX for streamlined processes. Keeping up with changes in tax laws is vital. Adhering to these guidelines ensures transparency, legality, and peace of mind when participating in crypto transactions in India.

FAQs

Disclaimer: This article is for general information only and does not constitute tax, legal or investment advice. Tax treatment can depend on individual facts and subsequent regulatory changes.