Crypto Tax in India: 30% Tax, 1% TDS and the ITR Schedule
Crypto tax in India is simple to state and hard on the pocket. Profit from selling or swapping crypto is taxed at a flat 30% plus cess, whatever your slab. Only the purchase cost is deducted, losses are not adjusted, and 1% TDS applies on sales. Every transaction goes into Schedule VDA of your return.
- Gains on virtual digital assets (VDAs) such as Bitcoin, Ether and NFTs are taxed at 30% plus 4% cess under section 115BBH of the 1961 Act.
- You can deduct only the cost of acquisition. No other expense, and no set-off of losses.
- 1% TDS under section 194S applies when you sell, above small yearly thresholds.
- Report each transaction in Schedule VDA, in ITR-2 or ITR-3.
- Budget 2026 kept the 30% and 1% for tax year 2026-27 and added penalties for reporting entities that do not file crypto statements.
In this guide
What counts as crypto for tax?
The law uses the term virtual digital asset. It covers cryptocurrencies, tokens and NFTs. It does not cover Indian or foreign currency. If you sold a VDA for rupees, swapped one coin for another, or paid for something with crypto, you made a transfer, and the gain is taxable.
How is the tax worked out?
The rules below apply to FY 2025-26 (return filed in 2026) and, as things stand, to tax year 2026-27 as well.
| Rule | What it means for you |
|---|---|
| Rate | 30% of the gain, plus surcharge if your income is high, plus 4% cess |
| Deduction | Only the cost of acquisition. Exchange fees, internet, interest on borrowed money are not deducted |
| Basic exemption and slab | The flat rate applies even if your other income is low |
| Loss on one coin | Cannot be set off against profit on another coin or against any other income |
| Carry forward | A crypto loss cannot be carried to later years |
| Holding period | Does not matter. There is no long-term benefit |
The return form reflects this. In Schedule VDA for assessment year 2026-27, the income on each line is the sale value minus the cost, and the total is the sum of the lines with a profit only. Lines with a loss do not reduce it.
A worked example
Riya, a salaried employee, traded on an Indian exchange in FY 2025-26.
- Bitcoin: bought for Rs 2,00,000, sold for Rs 3,20,000. Profit Rs 1,20,000.
- Ether: bought for Rs 1,50,000, sold for Rs 1,00,000. Loss Rs 50,000.
- Exchange fees paid: Rs 4,000.
You might expect tax on Rs 66,000, the net figure. It does not work that way. The loss and the fees are ignored. Taxable income from crypto is Rs 1,20,000.
Tax at 30% is Rs 36,000. Cess at 4% is Rs 1,440. Total Rs 37,440.
The exchange deducted 1% TDS on her sales of Rs 4,20,000, that is Rs 4,200. She claims this as credit and pays the balance of Rs 33,240. This is over and above the tax on her salary.
How does the 1% TDS work?
Under section 194S, the person paying you for a VDA deducts 1% of the sale value. On an Indian exchange, the exchange does this and you see a slightly lower amount credited. TDS is not required if the total paid to you in the year is within Rs 50,000 for a specified person, broadly an individual or HUF with no business income or business turnover below set limits, and Rs 10,000 for others.
The TDS is on the sale value, not on profit. So it is deducted even on a loss-making sale. It is not an extra tax. It shows in your Form 26AS and AIS, and you adjust it against your final tax or get it back as a refund.
How to report crypto in your ITR
- Download the transaction report or tax statement for 1 April to 31 March from every exchange and wallet you used.
- For each sale or swap, note the date of purchase, date of transfer, cost and sale value.
- Pick the form. With salary and crypto held as an investment, use ITR-2. If you trade crypto as a business or have other business income, use ITR-3. ITR-1 and ITR-4 do not have Schedule VDA.
- Fill Schedule VDA line by line and choose the head of income, capital gains or business.
- Check that the 1% TDS in Form 26AS matches the exchange statement, and claim it.
- Pay the balance tax with interest, if any, and file.
Not sure about the form? See which ITR form to file.
What about tax year 2026-27?
Income from 1 April 2026 is under the Income-tax Act, 2025. Budget 2026 did not change the 30% rate, the no set-off rule or the 1% TDS. The section numbers are new, so forms for 2026-27 will not say 115BBH or 194S.
What is new is on the reporting side. Exchanges and other reporting entities must give the department a statement of crypto transactions under section 509 of the new Act. Budget 2026 proposed a penalty of Rs 200 a day for not filing it and Rs 50,000 for wrong details that are not corrected. For you, this means the department will increasingly have your trades before you file.
The mistake people usually make
They net profits against losses and pay tax on the difference. The second mistake is leaving crypto out because the money was never withdrawn to the bank. A sale or swap inside the exchange is taxable in that year. The third is ignoring the mismatch: the return utility flags cases where TDS on VDA is claimed but no VDA income is shown. If you missed crypto in an earlier year, an updated return may be the way to correct it.
Should you do this yourself?
With one Indian exchange and a few trades, yes. Take help if you used foreign exchanges or private wallets, did many coin-to-coin swaps, received crypto as a gift or airdrop, or earned from staking or mining. The treatment of some of these is not settled.
Sources
- Income Tax Department, e-filing portal: ITR-2 FAQs on Schedule VDA and the 30% rate (checked 12 Nov 2026)
- e-filing portal: ITR-3 validation rules for AY 2026-27 (Schedule VDA, section 115BBH) (checked 12 Nov 2026)
- e-filing portal: which return applies to you, AY 2026-27 (checked 12 Nov 2026)
- Press Information Bureau: Budget 2026-27 speech (penalty for not furnishing crypto-asset statements) (checked 12 Nov 2026)
- Income Tax Department: section 194S, TDS on transfer of virtual digital assets
How AprilTax can help
AprilTax offers income tax return filing by a Tax Expert at a fixed fee, starting from Rs 1,499, done fully online. Share your exchange statements and Form 26AS, and the Tax Expert prepares Schedule VDA, matches the 1% TDS and files the right form. See income tax return filing.
Frequently asked questions
How much tax do I pay on crypto in India?
Can I set off crypto losses against crypto profits?
What is the 1% TDS on crypto?
Which ITR form do I use for crypto income?
Is swapping one crypto for another taxable?
Can I deduct exchange fees and other expenses?
Do I pay tax on crypto if my income is below the taxable limit?
What if I did not report crypto in an earlier year?
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