Key Takeaways
- Gains from transferring a virtual digital asset are taxed at a flat 30 percent plus 4 percent cess, whatever your slab or holding period.
- 1 percent is deducted at source above the annual threshold. It is a prepayment, not an extra tax, and you claim credit when you file.
- Losses cannot be set off against other crypto gains or any other income, or carried forward.
- Budget 2026 kept the rate but added reporting penalties. Since April 2026, Indian platforms report your transactions to the department.
- Gains go in Schedule VDA; crypto held abroad also goes in Schedule FA, at any value. Cross-border data sharing begins April 2027.
Crypto taxes in India are charged at a flat 30 percent plus 4 percent cess on gains from transferring a virtual digital asset, with 1 percent deducted at source on transfers above the threshold. Losses cannot be set off or carried forward. Gains are reported in Schedule VDA, and crypto held on foreign platforms in Schedule FA. From 1 April 2026, Indian platforms report user transaction data to the tax department directly, and cross-border data sharing begins in April 2027.
Introduction
Budget 2026 left the crypto tax India rate untouched but rebuilt enforcement around it. The rules deciding how much tax on crypto in India you owe are unchanged since 2022. What changed is that the department now receives your transaction data from your exchange, under a framework going international in 2027.
This guide covers the rate, taxable events, Schedule VDA and Schedule FA reporting, the penalties, and which version of the law applies to you.
This article is educational and is not tax advice. Crypto products and NFTs are unregulated and can be highly risky.
How Crypto Tax in India Works: Three Core Rules
The Flat 30 Percent Rate
A virtual digital asset (VDA) is the legal term covering crypto and NFTs. Any gain from transferring one is taxed at a flat 30 percent, plus 4 percent cess and any surcharge: an effective rate of at least 31.2 percent.
The rate ignores your slab and holding period. There is no exemption threshold and no long-term concession. Only the cost of acquisition is deductible, so exchange fees and transfer costs cannot be claimed. Separately, 18 percent GST applies to platform fees, not the gain.
A crypto tax calculator India residents can use applies the flat rate to realised gains. CoinDCX’s crypto tax calculator is free.
The 1 Percent TDS
TDS is tax deducted at source, collected at the moment of the transaction. On VDA transfers it runs at 1 percent of consideration once you cross an annual threshold: ₹50,000 for a “specified person”, covering most salaried individuals and HUFs, and ₹10,000 for others. That threshold is a running aggregate, not per trade.
TDS is not an additional charge; it is credited against your final liability. Its real function is visibility, putting a timestamped record of your activity into the department’s systems. Indian exchanges handle it; in peer-to-peer trades, the buyer does.
See CoinDCX’s guide to 1% TDS on crypto trades.
No Set-Off, No Carry Forward
A loss on one token cannot reduce tax on gains from another token, from salary, or from any other head of income, and cannot be carried forward.
The arithmetic is unforgiving. Gain ₹6,00,000 on Bitcoin and lose ₹5,00,000 on another token the same year, and you are taxed on the full ₹6,00,000: roughly ₹1,87,200 payable against ₹1,00,000 of profit. A losing year can still produce a bill.
Which Law Applies to Your Return
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The substance carried over unchanged, but the section numbers moved.
| What it covers | 1961 Act | 2025 Act |
|---|---|---|
| Definition of a VDA | Section 2(47A) | Section 2(109) |
| 30 percent charge | Section 115BBH | Section 194 |
| 1 percent TDS | Section 194S | Section 393 |
| Reporting by platforms | Section 285BAA | Section 509 |
Which set you cite depends on when you transferred. Anything sold, swapped or spent up to 31 March 2026 uses the old numbering; transfers from 1 April 2026 sit under the 2025 Act. Your liability is unchanged; the references are not. Confirm the exact clause with your chartered accountant.
What Counts as a Taxable Event?
The 30 percent charge is triggered by a transfer, not by cashing out. That word causes most of the confusion.
| Action | Treatment |
|---|---|
| Selling crypto for rupees | 30 percent on the gain |
| Swapping one token for another | 30 percent on the gain |
| Spending crypto on goods or services | 30 percent on the gain |
| Mining, staking, airdrops, crypto salary | Slab rate on receipt, then 30 percent on later transfer |
| Buying and holding | Not taxable |
| Moving between your own wallets | Not taxable |
Swaps catch people out most often. No rupees change hands, and the transfer is taxable anyway. Rotate between tokens all year without withdrawing once, and you still have a liability.
Crypto received as income is taxed at slab rate on the day of receipt, and that rupee value then becomes your cost of acquisition.
What is not taxed: owning crypto, watching it appreciate on paper, or moving it between wallets you control.
How to Report Crypto in Schedule VDA
Schedule VDA is the section of the return where VDA gains are declared, transaction by transaction. It sits in ITR-2 for investment income, ITR-3 for business income.
Declaring is no longer a one-way statement. Since 1 April 2026, Indian platforms furnish transaction data directly to the department, and your TDS already appears in Form 26AS and your Annual Information Statement. The system compares your declaration against the exchange’s, and mismatches surface automatically.
Reconciliation is the priority. Keep the date, quantity and rupee value of every buy, sell and swap across every platform and wallet, then check those against your exchange statement and the AIS before filing.
See how to report crypto taxes in India and CoinDCX’s notes on ITR filing for crypto gains.
Crypto Held on Foreign Platforms
Foreign holdings add a second obligation. A resident and ordinarily resident taxpayer must disclose crypto held on overseas exchanges or wallets in Schedule FA, the foreign asset schedule. There is no minimum value: a dormant balance worth a few thousand rupees must still be reported.
The ₹20 lakh figure quoted here is widely misunderstood. It is not a disclosure threshold. Since 1 October 2024 it is the level below which the Black Money Act penalty for non-disclosure of non-immovable foreign assets does not apply. The duty to report survives beneath it.
The stakes are higher than for ordinary tax errors: a flat ₹10 lakh penalty per year, plus prosecution risk for wilful failure. India has also committed to the Crypto-Asset Reporting Framework (CARF), the OECD standard for automatic exchange of crypto account data. The CBDT confirmed in its July 2026 guidance note that cross-border exchange is intended to begin on 1 April 2027.
Crypto Tax Penalties in India
Budget 2026 went after reporting, not the rate. Two sets of consequences now run in parallel.
| Failure | Who it hits | Consequence |
|---|---|---|
| Not filing the transaction statement | Platforms | ₹200 per day of delay |
| Furnishing inaccurate information | Platforms | ₹50,000 |
| Under-reporting income | Taxpayers | 50 percent of tax on the shortfall |
| Deliberate misreporting | Taxpayers | 200 percent of tax on the shortfall |
| Undisclosed foreign holdings | Taxpayers | ₹10 lakh per year, plus prosecution risk |
The platform-side penalties took effect on 1 April 2026 and target reporting crypto-asset service providers: exchanges, brokers and wallet operators. They do not fall on you, but the consequence is significant. Platforms facing a daily fine for inaccurate filings have every incentive to report each account precisely, which is what gives the cross-check its teeth.
For individuals, the exposure was always the shortfall. What changed is the probability of discovery.
Can You Legally Reduce Crypto Taxes in India?
Searches for how to avoid crypto tax in India return lists of workarounds. The honest answer is that the design leaves very little room.
Legitimate steps are limited to accurate accounting: computing cost of acquisition correctly across every lot, claiming full credit for TDS already deducted, valuing each receipt at the correct rupee rate, and filing on time to avoid interest. Because losses cannot be offset, tax-loss harvesting does not apply here.
Concealment is not planning. Routing trades through a foreign exchange, splitting activity across platforms, or omitting gains from Schedule VDA are compliance risks. Domestic reporting is live, CARF extends it across borders from 2027, and misreporting carries a 200 percent penalty.
Compliance Checklist
Crypto exchanges now report your transactions to the Income Tax Department, so anything that does not match your return gets flagged. Work through the following checklist before you file for taxes..
- Record the date, quantity and rupee value of every transaction, across every platform and wallet you use
- Reconcile your own records against your exchange statement, Form 26AS and the Annual Information Statement (AIS) before you file
- Declare gains in Schedule VDA of your income tax return
- Declare holdings on foreign platforms in Schedule FA, which has no minimum value threshold
- Use platforms registered with FIU-IND, and verify the registration yourself on fiuindia.gov.in
- Work with a chartered accountant, particularly if you trade across multiple exchanges or hold assets offshore
FAQs
How much tax do I pay on crypto in India?
Gains from transferring a virtual digital asset are taxed at a flat 30 percent plus 4 percent cess and any surcharge, an effective rate of at least 31.2 percent. It does not vary with your slab or holding period. Only the cost of acquisition is deductible, and 1 percent TDS applies separately.
Which crypto transactions are taxable in India?
Selling crypto for rupees, swapping one token for another, and spending crypto on goods or services all trigger the 30 percent charge. Crypto received from mining, staking, airdrops or work is taxed at slab rate on receipt, then 30 percent on later transfer. Buying, holding and wallet-to-wallet moves are not taxable.
Do I pay tax if I only hold crypto and never sell?
No. Holding is not a taxable event, and unrealised appreciation is not taxed. The charge is triggered only when you transfer the asset by selling, swapping or spending it. Moving crypto between wallets you control does not count, since ownership does not change.
What is the TDS threshold on crypto in India?
TDS applies at 1 percent once your aggregate consideration for the year crosses ₹50,000 for a specified person, covering most salaried individuals and HUFs, or ₹10,000 for everyone else. The threshold is cumulative, not per transaction. Indian exchanges deduct it; in peer-to-peer trades, the buyer does.
Do I have to report crypto held on foreign exchanges?
Yes. A resident and ordinarily resident taxpayer must disclose foreign crypto holdings in Schedule FA regardless of value. The ₹20 lakh figure often cited is a Black Money Act penalty threshold, not a disclosure exemption. From April 2027, India intends to receive foreign platform data under CARF.
Did Budget 2026 change the crypto tax rate?
No. The flat 30 percent rate, the 1 percent TDS and the no-set-off rule all continued unchanged. Budget 2026 focused on enforcement instead, adding penalties on reporting platforms of ₹200 per day for late statements and ₹50,000 for furnishing inaccurate information.
