Crypto tax guide
Crypto tax in India 2026: the complete guide
In India, crypto and NFTs are "Virtual Digital Assets" (VDAs). Gains are taxed at a flat 30%, 1% TDS is deducted on sales, and losses give you no relief. Here's everything in one place.
The rules in short
| Rule | What it means for you |
|---|---|
| 30% flat tax | Every crypto gain is taxed at 30%, whatever your income slab. Plus 4% cess, so 31.2% in total. |
| Only purchase cost is deductible | No deduction for fees, software, internet or other expenses. |
| No loss set-off | A crypto loss can't reduce tax on other income, can't be carried forward, and the tax department's position is it can't be set off against a gain on another coin either. |
| 1% TDS | Deducted on the sale value when you sell or swap. Credited against your final tax. TDS guide |
| Reporting | Every transfer goes in Schedule VDA of ITR-2 or ITR-3. Filing guide |
SourceIncome Tax Dept, s.115BBH, TaxGuru, VDA taxation, IncorpX, VDA tax rules, Income Tax Dept, s.194S, KoinX, Schedule VDA guide.
A worked example
You buy Bitcoin for ₹2,00,000 and sell it for ₹3,50,000. Your gain is ₹1,50,000. Tax is 30% of that, ₹45,000, plus 4% cess of ₹1,800, so ₹46,800 in total. The exchange already cut 1% TDS (₹3,500), which reduces what you still owe to ₹43,300.
Now suppose you also sold Solana at a ₹30,000 loss. Under the current rules that loss doesn't reduce your ₹1,50,000 gain. You still owe ₹46,800. Try your own numbers in the crypto tax calculator.
SourceIncome Tax Dept, s.115BBH, IncorpX, VDA tax rules. Worked example is our own calculation.
What counts as a taxable event
- Selling crypto for rupees. Taxable.
- Swapping one crypto for another. Taxable. It's a transfer at the market value you received.
- Spending crypto on goods or services. Taxable, for the same reason.
- Receiving crypto as a gift. Taxable for the person receiving it if the value is above ₹50,000 and it isn't from a relative or on an occasion like marriage. It's treated as income from other sources.
- Mining, staking and airdrops. Usually taxed as income when received; a later sale is then taxed at 30% on any further gain. Treatment can vary, so check with a CA.
- Buying and holding. Not taxed until you transfer it.
SourceIncome Tax Dept, s.115BBH, TaxGuru, VDAs AY 2026-27, TaxTMI, Budget 2022 VDA scheme. Mining, staking and airdrop treatment is general guidance and is not settled in the Act; confirm with a CA.
Which law applies: the 1961 Act or the 2025 Act?
India's new Income-tax Act, 2025 took effect on 1 April 2026. The rates and rules for crypto stayed the same, but the section numbers changed.
| What | FY 2025-26 (ITR filed in 2026) | FY 2026-27 onwards |
|---|---|---|
| 30% tax on VDA income | Section 115BBH, Income-tax Act 1961 | Section 194 (table entry), Income-tax Act 2025 |
| 1% TDS on transfer | Section 194S | Section 393(1), table Sl. No. 8(vi) |
| Definition of VDA | Section 2(47A) | Carried over to the 2025 Act |
Budget 2026 kept the 30% rate and 1% TDS unchanged. It also introduced new penalties for exchanges that don't report crypto transactions properly, so expect your Annual Information Statement (AIS) to show your trades more completely than before.
SourceTaxGuru, VDA under the 2025 Act, TaxTMI, Clause 194 vs s.115BBH, TDSMAN, Section 393(1), Decrypt, Budget 2026.
Missed filing for FY 2025-26? The due date for most individuals was 31 July 2026. A belated return can still be filed until 31 December 2026, with a late fee. Don't leave crypto out; exchange data reaches the tax department.
SourceKoinX, Schedule VDA guide, TechBullion, crypto ITR guide.
Five ways to stay out of trouble
- Use exchanges registered with FIU-IND. How to check
- Download your full trade history from every exchange and wallet each year.
- Match the TDS in your Form 26AS / AIS with your own records before filing.
- Report every transfer in Schedule VDA, even small ones and losses.
- Declare crypto held on foreign exchanges in Schedule FA.
Don't want to do this by hand?Crypto tax software builds your Schedule VDA report from exchange data. Affiliate link.
Try crypto tax softwareFrequently asked questions
What is the crypto tax rate in India in 2026?
30% on gains plus 4% health and education cess, which is 31.2% in total. Budget 2026 left these rates unchanged.
Is swapping one crypto for another taxable?
Yes. A crypto-to-crypto swap is a transfer, so any gain is taxed at 30%, valued at the market value of what you received.
Is crypto received as a gift taxable?
Yes, for the person receiving it, if the total value is above ₹50,000 in a year and it is not from a relative or on an occasion such as marriage. It is taxed as income from other sources.
Which section taxes crypto under the Income-tax Act, 2025?
From FY 2026-27, the 30% tax sits in Section 194 (table entry) of the Income-tax Act, 2025, replacing Section 115BBH. TDS moved from Section 194S to Section 393(1). Rates did not change.
Do I pay tax if I only buy and hold crypto?
No. Tax applies when you transfer it: sell, swap or spend it. Holding alone is not taxed.
Sources
We check our explanations against these. Credit to the original publishers.