Gains from selling or swapping crypto in India are taxed at a flat 30% plus 4% cess under Section 115BBH, with 1% TDS on the sale and no set-off for losses. Only the cost of buying is deductible.
Below: what counts as a virtual digital asset, how to work out the tax, how TDS and losses work, and how to report crypto in your return.
What a Virtual Digital Asset Is
A virtual digital asset (VDA) is any code, number or token made by cryptographic means that is not Indian or foreign currency. It covers cryptocurrencies, NFTs and similar tokens.
Section 2(47A) of the Income Tax Act, 1961 defines the term, and the Finance Act 2022 brought VDAs into the tax net from 1 April 2022. Read the Act on incometaxindia.gov.in.
See your total tax
Add your crypto gain to your other income to see the full tax for the year.
Is Crypto Taxed in India
Yes, gains from crypto are taxable in India, and the tax arises when you transfer the asset, not when you buy or hold it. The events below count as a transfer.
The 30% Tax Rate on Crypto Gains
The tax rate is a flat 30% plus 4% cess under Section 115BBH, which works out to 31.2% before any surcharge. The same rate applies whether you held for a day or for years.
The rate applies whether the income is a capital gain or business income, and there is no lower rate for long-term holding.
How to Calculate Tax on Crypto
The taxable gain is the sale value minus the cost of acquisition, and nothing else can be deducted. Fees, gas, electricity and hardware are all ignored.
Tax = (Sale value - Cost of acquisition) x 30% x 1.04| Coin | Bought | Sold | Gain or loss | Taxable |
|---|---|---|---|---|
| Bitcoin | Rs 60,000 | Rs 80,000 | Rs 20,000 | Rs 20,000 |
| Ethereum | Rs 40,000 | Rs 30,000 | Loss of Rs 10,000 | Rs 0 |
| Total | Rs 1,00,000 | Rs 1,10,000 | Net Rs 10,000 | Rs 20,000 |
The tax is 30% of Rs 20,000, which is Rs 6,000, plus Rs 240 of cess, so Rs 6,240. Netting the loss would have given Rs 3,120, which the law does not allow.
| Item | Amount |
|---|---|
| Sale value | Rs 5,00,000 |
| Cost of acquisition | Rs 2,00,000 |
| Taxable gain | Rs 3,00,000 |
| Tax at 30% | Rs 90,000 |
| Cess at 4% | Rs 3,600 |
| Total tax | Rs 93,600 |
Which Head of Income Crypto Falls Under
Crypto income falls under capital gains, business income or other sources, depending on how you hold it and how you got it. The 30% rate stays the same for the first two.
| Situation | Head of income |
|---|---|
| Held as an investment | Capital gains |
| Traded often as a business | Profits and gains of business or profession |
| Received as a gift or reward | Income from other sources |
Loss Rules for Crypto
A crypto loss cannot be set off against any income, and it cannot be carried forward. Section 115BBH blocks both, including set-off against gains on other crypto.
This makes each transfer stand alone, so keep a record of every one. A year of mixed trades can leave you with tax to pay even when your portfolio is down.
1% TDS on Crypto Under Section 194S and Section 393
The payer deducts 1% of the sale value as TDS when you sell or swap a VDA. Section 194S of the 1961 Act set it, and from 1 April 2026 it sits in Section 393(1) of the Income-tax Act, 2025.
| Point | Rule |
|---|---|
| Rate | 1% of the sale value, not of the gain |
| Old section | Section 194S, Income Tax Act, 1961 |
| New section | Section 393(1), Income-tax Act, 2025 |
| Who deducts | The payer, usually the exchange |
| Threshold | Rs 10,000, or Rs 50,000 for specified persons |
A sale of Rs 5,00,000 carries Rs 5,000 of TDS. It is not an extra tax: you claim it as credit in your return, and it appears in your Form 26AS and annual information statement. The TDS guide explains how credit works.
Tax on Crypto Gifts
Crypto gifts are taxed only when they pass Rs 50,000 in a year from people who are not relatives, and then the whole amount is taxed at slab rates. The Finance Act 2022 put VDAs under the gift rules.
Tax on Airdrops, Mining and Staking
The common view is that airdrops, mining rewards and staking income are taxed as income at their market value when you receive them. The Income Tax Department has issued no specific guidance.
Under that view a later sale is taxed at 30% on the gain over the value already taxed. Say 20,000 tokens arrive at Rs 10 each, so Rs 2,00,000 is income, and you sell for Rs 5,00,000. The gain is Rs 3,00,000, and the tax is Rs 93,600.
Expect disputes on valuation and on mining costs, since 115BBH allows no expense. Record each reward with its date and rupee value.
Tax Treatment by Type of Transaction
Tax follows the transfer, so most transactions fall into a few cases. The table sets out the common treatment for each.
| Transaction | Tax treatment |
|---|---|
| Buy and hold | No tax until you transfer it |
| Sell for rupees | 30% on the gain, 1% TDS on the sale value |
| Swap one crypto for another | 30% on the gain, TDS applies |
| Spend crypto on goods | Treated as a transfer, 30% on the gain |
| Move between your own wallets | Generally not a transfer |
| Gift above Rs 50,000 from a non-relative | Slab rates as other sources |
| Airdrop, mining or staking reward | Common view: slab income on receipt |
| Salary paid in crypto | Taxed as salary at its value on receipt |
How to Report Crypto in Your Income Tax Return
You report crypto in Schedule VDA of ITR-2 or ITR-3, with each transfer listed. ITR-2 is for investment gains and ITR-3 is for business income.
Collect the records
Download the transaction history from every exchange and wallet you used in the year.
Work out each gain
For each transfer, subtract the purchase cost from the sale value. Ignore fees and do not net losses.
Add the gains
Add only the gains, then charge 30% plus 4% cess on the total.
Check the TDS
Match the 1% TDS in Form 26AS and the annual information statement with your records.
Fill Schedule VDA
List each transfer in the right ITR, and keep the exchange reports on file.
Pay and file
Pay any tax left after TDS and advance tax, then file and e-verify the return.
If tax after TDS is Rs 10,000 or more, advance tax applies. The Advance Tax Calculator estimates it, and the ITR filing last date guide has the deadlines.
Budget 2026 and the Income-tax Act, 2025
Reports say Budget 2026 left the 30% rate, the 1% TDS and the loss rules unchanged. The Income-tax Act, 2025 applies from 1 April 2026 and renumbers the sections.
Income of FY 2025-26 is still reported under the 1961 Act. From FY 2026-27, quote the new section numbers, and confirm them on incometaxindia.gov.in since the sources disagree on some mappings.
Frequently Asked Questions: Crypto Tax in India
Disclaimer: Rules follow the Income Tax Act, 1961 and, from 1 April 2026, the Income-tax Act, 2025. Airdrop and staking treatment is the common view, not official guidance. Confirm section numbers on incometaxindia.gov.in. This page is general information and not tax advice.