Crypto tax in India: 30% tax, 1% TDS and how to show it in your ITR

The 30% rule in plain words

Crypto, NFTs and similar tokens are called virtual digital assets, or VDAs, in tax law. Any profit on selling or swapping one is taxed at 30%, whatever your income slab and however long you held it. Add 4% cess and the rate is 31.2%.

The only deduction is the cost of buying the asset. Exchange fees, gas fees, internet bills and advisory charges are not allowed. Example: you bought a coin for ₹1,00,000 and sold it for ₹1,50,000, paying ₹500 in exchange fees. The taxable gain is ₹50,000, not ₹49,500, and the tax is ₹15,600.

For FY 2025-26 this is Section 115BBH of the Income-tax Act 1961. From 1 April 2026 the same rule sits in Section 194 of the new Income-tax Act 2025. The number changed; the rule did not.

Losses do not help you

This is the part that surprises traders. A loss on one coin cannot be set off against a gain on another coin, or against salary, business income or share gains. It also cannot be carried forward to next year. If you lost ₹20,000 on one token and made ₹50,000 on another, you pay 30% on the full ₹50,000.

The 1% TDS is not the tax

When you sell on an Indian exchange, the exchange deducts 1% of the sale value as TDS once your sales in the year cross ₹50,000 (₹10,000 if you have a larger business). You will see these entries in your AIS under Section 194S, which becomes Section 393 under the new Act.

This 1% is an advance, not the final tax. It is adjusted against your 30% liability, and if you made a loss overall, it comes back as a refund when you file. Many people leave this money with the department simply because they never file. If you trade on a foreign exchange or peer to peer, nobody deducts for you, and the deduction becomes your responsibility.

How it is reported in the return

Crypto income cannot go in ITR-1 or ITR-4. You file ITR-2, or ITR-3 if you also have business income, and list every sale in Schedule VDA: date bought, date sold, cost, and sale value. Download the tax report from your exchange, check it against your AIS, and report all of it. Since April 2026, exchanges report your transactions to the tax department, so a return that leaves trades out will not match what the department already holds.

If you have not yet filed for FY 2025-26, a belated return can still be filed up to 31 December 2026.

Airdrops, staking rewards and gifts

Coins you receive free, from an airdrop, staking or mining, are taxed as income at your slab rate in the year you receive them, at their value that day. When you later sell them, the 30% applies to the gain over that value. Crypto received as a gift from someone other than a close relative is taxable if the value in the year crosses ₹50,000.

Common questions

What we do

We take the tax reports from your exchanges, match them to your AIS, prepare Schedule VDA transaction by transaction, and file ITR-2 or ITR-3 so that your 1% TDS is claimed in full. If you traded on more than one exchange, or on a foreign one, send us the statements and we will tell you what is reportable before anything is filed.

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