Law checked 23 August 2026
Published 23 August 2026
38 min read
Written and maintained by the CryptoKar team
India
Crypto Tax FAQ
Crypto gains in India are taxed at a flat 30% under Section 115BBH with 4% cess on that tax, and 1% is withheld from the sale value under Section 194S. Everything else people ask about, from swaps and airdrops to Schedule VDA, AIS mismatches, tax notices and offshore platforms, sits below in 17 sections and 137 answers, most of them worked through in rupees.
Key highlights
Five rules decide the answer to most of the questions below. The sections that follow are what sits behind them.
- 30%
Flat tax on the gain, plus 4% cess on that tax
Section 115BBH
- 1%
Withheld from the sale value, claimed back as credit
Section 194S
- Cost only
Cost of acquisition is the single deduction
No fees, no gas, no interest
- Zero
Set-off and carry-forward of a VDA loss
Inside crypto and outside it
- Row by row
Every disposal reported on its own line
Schedule VDA, in ITR-2 or ITR-3
Searches the questions, the answers and the worked examples together.
Crypto tax basics in India
The rate, what it attaches to, and the parts of an ordinary return that still apply.
The gain on a transfer of a virtual digital asset, and only the gain. Section 115BBH charges sale consideration minus cost of acquisition at a flat 30%, with 4% cess on the tax itself rather than on the gain. Your slab rate does not enter it.
Worked example
- Sale consideration: ₹4,00,000
- Cost of acquisition: ₹2,50,000
- Taxable gain: ₹1,50,000
- Tax at 30%: ₹45,000
- Cess at 4% on ₹45,000: ₹1,800
Total liability ₹46,800, before any TDS credit.
Section 2(47A) reaches any information, code, number or token generated through cryptographic means, along with non-fungible tokens and anything the government notifies. Coins, tokens, stablecoins and NFTs sit inside it. Indian currency and foreign currency sit outside it.
Yes. There is no minimum and no exemption slab inside Section 115BBH, so ₹500 of profit is charged the same way as ₹5,00,000. The threshold people are thinking of belongs to the 1% deduction under Section 194S, which is withholding rather than a separate tax.
Worked example
- Gain on one small trade: ₹500
- Tax at 30%: ₹150
- Cess at 4% on ₹150: ₹6
Total liability ₹156. The rate does not scale down with the size of the trade.
Surcharge is not a crypto rule. It attaches to total income once the surcharge thresholds are crossed and applies over the 30%, with the 4% cess then computed on tax plus surcharge. Where total income stays below the first threshold, no surcharge arises.
Schedule VDA carries a head of income column and accepts either. The 30% under Section 115BBH is the same under both, so what the head changes is the rest of the return, since business income pulls you into ITR-3 and a set of schedules a capital gains filer never opens. Frequency, volume, holding period and borrowed funds decide which one fits your year.
Section 115BBH sets a flat rate with no threshold of its own, and the basic exemption limit is built for slab income. Whether that limit can absorb VDA income where the rest of your total income is nil is contested, and CBDT has not clarified it, so this page states no answer. Take it to a chartered accountant.
No. There is no long term or short term split for a virtual digital asset. A coin sold after four days and a coin sold after four years are both charged at the same flat 30% plus cess, and no indexation is available against either. Holding period still matters for a different reason, since it is one of the facts that points to capital gains rather than business income.
The year the transfer happened, not the year the money reached your bank. A swap on 28 March sits in that financial year even where the rupees are withdrawn in April. Schedule VDA asks for the date of transfer against every row for exactly this reason.
Not on the VDA part. Section 115BBH sits outside the slab structure, so the choice of regime moves your salary and other income and leaves the 30% where it is. What the regime changes is the tax on everything else in the return, and through that, whether surcharge thresholds are crossed.
Transactions that trigger tax
Section 115BBH charges a transfer. These are the transfers people do not expect to be one.
Yes. Paying for goods or a service with a coin is a transfer of that coin, so the gain over its cost is charged at 30% plus cess. The rupee value of what you received is your sale consideration.
Worked example
- Bought 0.05 BTC for ₹1,80,000
- Paid with it for a laptop listed at ₹2,10,000
- Sale consideration: ₹2,10,000
- Gain: ₹30,000
- Tax ₹9,000 plus cess ₹360
₹9,360 due on a purchase where no rupees ever moved.
Yes. A stablecoin is a virtual digital asset like any other, so swapping ETH into USDT disposes of the ETH and the gain is charged even though no rupees moved. The USDT then starts its own cost basis at that same value.
Worked example
- ETH cost of acquisition: ₹2,00,000
- Swapped for USDT worth ₹2,45,000 on the day
- Gain on the ETH: ₹45,000
- Tax ₹13,500 plus cess ₹540
₹14,040 due, and the USDT starts its own cost basis at ₹2,45,000.
Yes. The rate never turns on the venue. What a peer to peer trade changes is the withholding, since no platform stands between the two of you and the buyer deducts the 1%, and the evidence burden, since a bank credit from a stranger has to be tied back to the trade later.
Gifts run on Section 56(2)(x) rather than on Section 115BBH. A gift from a relative as the Act defines that term is outside the charge whatever it is worth, and so is one received on the occasion of your marriage or under a will. From anyone else, gifts crossing ₹50,000 in aggregate across the year are income at your slab rate on the day they arrive. Section 115BBH takes over on the day you sell.
Worked example
- Three friends send tokens across the year
- ₹20,000 plus ₹18,000 plus ₹15,000
- Aggregate: ₹53,000, above the ₹50,000 line
The whole ₹53,000 is income at your slab rate, not just the ₹3,000 above the line.
The charge under Section 56(2)(x) sits with the person receiving it, not with the giver. Whether the act of gifting is itself a transfer that triggers Section 115BBH in the giver's hands has not been clarified, so this page states no answer on that. Record the date and the value either way, because the recipient will need both.
The Act carries no provision for this and CBDT has published nothing on it. What the statute alone supports is narrow. A theft is not a transfer, so it produces no consideration and no gain to report, and Section 115BBH allows only the cost of acquisition against a gain, so there is no route to relief for what the coins cost you. How a specific loss is evidenced belongs with a chartered accountant.
In two stages. The coin is your professional receipt, valued in rupees on the day it arrives and taxed under the ordinary head at your slab rate. Section 115BBH then applies to the gain above that value when you transfer it.
The absence of rupees changes nothing. A commission paid in tokens is a receipt for services, valued in rupees on the day it arrives and taxed at your slab rate, and the tokens then carry that value as their cost of acquisition. Two separate events sit on top of each other, which is why a platform's own profit and loss report rarely matches the return.
No. The beneficial owner has not changed, so nothing has been transferred. The movement still has to be recognisable in your records, because a wallet withdrawal that looks like a disposal will be read as one and will invent a gain that was never realised.
Not settled. Where old tokens are exchanged for new ones the question is whether that swap is a transfer under Section 2(47A), and CBDT has published nothing on migrations, forks or chain splits. Keep the ratio, the date and the announcement, and take the treatment to a chartered accountant.
TDS deducted on your trades
The 1% under Section 194S is withholding against the same liability, not a tax of its own.
Once your VDA consideration crosses the annual threshold. For FY 2025-26 that is ₹50,000 in the financial year if you are a specified person, and ₹10,000 for everyone else. A specified person is broadly an individual or HUF with no business income, or one whose business turnover stays under ₹1 crore and professional receipts under ₹50 lakh. Both figures are annual.
Yes. The 1% is computed on the consideration, not on the gain. It is an advance against your liability, so anything withheld above what you owe for the year comes back as a refund.
Worked example
- Bought for ₹5,20,000, sold for ₹4,80,000
- Loss: ₹40,000, so no tax arises on the trade
- TDS deducted at 1% of ₹4,80,000: ₹4,800
₹4,800 is refundable through the return, and only through the return.
Both sides. Each party is handing over a virtual digital asset, so each is a buyer and a seller at once and each carries a deduction duty. CBDT Circular 14/2022 sets out that mechanism, along with the exchange route that replaces it when the trade happens on a platform.
Worked example
- You swap 1 ETH worth ₹2,50,000 for SOL worth ₹2,50,000
- You are transferring a VDA, so 1% applies: ₹2,500
- The counterparty is also transferring a VDA: ₹2,500
Two deductions on one swap. On a platform, the exchange handles both legs instead.
Not from you on an ordinary rupee purchase through an exchange, where the deduction attaches to the seller's consideration. It becomes your duty in a peer to peer purchase, where you pay the seller and withhold the 1% yourself, and in a swap, where you are handing over a virtual digital asset as well.
In Form 26AS and the Annual Information Statement, both sitting under your PAN on the e-filing portal. Claim against what the deductor actually deposited rather than against your exchange statement. Where the AIS shows a transfer you do not recognise, the portal carries a feedback route for exactly that.
By filing the return. The withheld amount goes into the TDS schedule and reduces the tax you pay, and anything above your liability for the year is refunded through the ordinary refund process. Nothing comes back if the return is never filed.
Because the two are measured against different things. The 1% runs on every rupee of sale consideration, and an active trader turns the same capital over many times in a year, so the base the TDS is computed on is a multiple of the capital that produced the profit.
Worked example
- ₹2,00,000 of capital, traded in and out 30 times
- Total sale consideration across the year: ₹60,00,000
- TDS at 1%: ₹60,000
- Net gain for the year: ₹40,000, tax ₹12,000 plus cess ₹480
₹60,000 withheld against a ₹12,480 liability. The balance is a refund, once the return is filed.
You can only claim credit for what reaches the government under your PAN, which is why Form 26AS rather than the exchange statement is the document to reconcile against. Where the two disagree, the gap is a matter to raise with the deductor, and Section 276B addresses tax that was deducted and then not paid over.
Deducting is only the first half of the duty. The amount has to reach the government and be reported, which is what puts it into the seller's Form 26AS and lets them claim it. The forms and due dates for a non-business deductor are procedural, so confirm them with a chartered accountant before your first P2P purchase.
This page states no figure. From 1 April 2026 the same 1% deduction sits in Section 393(1) of the Income Tax Act 2025, and whether the ₹10,000 and ₹50,000 figures carry across unchanged is not something we can confirm from the statutory text, while practitioner write-ups disagree with each other. The number goes here once the bare Act confirms it.
Rewards, airdrops and salary in crypto
Coins that arrive without a purchase. The Act says little here, so several of these are readings rather than settled rules.
At its fair market value in rupees on the day it reaches you, on the reading most practitioners follow. That value then becomes the cost of acquisition, so Section 115BBH charges 30% only on the movement above it when you sell. CBDT has not clarified the receipt treatment.
Worked example
- 500 tokens land, worth ₹12 each on the day: ₹6,000
- That ₹6,000 is income at your slab rate on receipt
- Sold later at ₹20 each: ₹10,000
- Gain over the ₹6,000 basis: ₹4,000
- Tax ₹1,200 plus cess ₹48
Slab tax on ₹6,000, then ₹1,248 on the ₹4,000 of growth.
They are taxed at two points, not twice on the same amount. The receipt is treated as income at your slab rate on the day's value on the common reading, and Section 115BBH then charges 30% on the gain above that value when you sell. The Act says nothing directly about the receipt, so this is a reading and not a settled rule.
Worked example
- Rewards received across the year, valued at receipt: ₹18,000
- Taxed at your slab rate on that ₹18,000
- Sold for ₹25,000 later
- Gain over the ₹18,000 basis: ₹7,000
- Tax ₹2,100 plus cess ₹84
Two events, two bases. Nothing is charged twice on the same ₹18,000.
Only what arrives as a reward is an income event on the common reading. The coins you locked up are still your coins with their original cost and date, and no transfer has happened just because they are staked. The tracking problem is real though, because auto-compounding produces a stream of tiny receipts, each with its own date and value.
Less settled than the rest of this page. Section 115BBH(2)(a) allows only the cost of acquisition, and a mined coin has none, which is why the position on mining is unclear. Electricity and hardware are not deductible against a VDA gain either. This one belongs with a chartered accountant.
Not on receipt. Salary is salary whatever it is paid in, valued in rupees and taxed at your slab rate with withholding under the salary provisions. Section 115BBH takes over on the gain when you later transfer the coin.
Worked example
- USDT worth ₹80,000 paid as one month's salary
- ₹80,000 goes into salary income at your slab rate
- Sold two months later for ₹83,000
- Gain: ₹3,000, tax ₹900 plus cess ₹36
₹936 of VDA tax sits on top of the ordinary salary tax on ₹80,000.
On the common reading they are income at their rupee value on the day they arrive, taxed at your slab rate, with that value becoming the cost basis for a later sale. The Act carries no specific provision for them.
It is treated the same way as any other coin that arrives without a purchase, so the common reading values it in rupees on the day it lands and taxes it at your slab rate. Small individual receipts do not change the analysis, they only make the recordkeeping harder. Nothing here has been clarified by CBDT.
Through the pair it actually trades against, converted to rupees on the day. Where a token only trades against USDT, the working is token to USDT to rupees, and the rate you used has to be recorded alongside the figure. A value you cannot reconstruct later is a value you cannot defend.
The common reading turns on when the tokens reach you and are yours to move. Tokens sitting in a claim contract that you have not claimed are a different position from tokens in your wallet. CBDT has published nothing on the point, so record the claim date and take it to a chartered accountant.
Section 115BBH applies to transfers from the assessment year it came into force, so it is the date of the transfer that matters rather than the date you acquired the coin. A coin bought in 2019 and sold now is charged under Section 115BBH on the gain over its 2019 cost, which is why old purchase records still matter.
DeFi, NFTs and crypto loans
The area with the least guidance. What follows separates the settled parts from the open ones.
Yes on the charge. Non-fungible tokens are named in Section 2(47A), so a sale is a VDA transfer charged at 30% plus cess with cost of acquisition as the only deduction. Minting costs, gas and marketplace fees are not deductible, which is what makes a low margin flip expensive.
Worked example
- Minted for ₹8,000, plus ₹1,200 of gas
- Sold for ₹30,000, marketplace fee ₹1,500
- Cost of acquisition allowed: ₹8,000
- Gain: ₹22,000, tax ₹6,600 plus cess ₹264
₹6,864 due. The ₹2,700 of gas and fees reduces nothing.
A royalty is a receipt for the work rather than a transfer of the token, so the common reading puts it in ordinary income at your slab rate, valued in rupees on the day it arrives. Section 115BBH then applies to the coin you received when you transfer it. CBDT has not clarified creator royalties.
Not settled. Handing tokens to a pool and receiving an LP token back looks like an exchange of one asset for another, which would be a transfer, and it also looks like a deposit against a receipt, which would not be. CBDT has published nothing on it. Record both legs with dates and values and take the treatment to a chartered accountant.
The same hedge that applies to staking applies here. The common reading treats each reward as income at its rupee value on the day it arrives, with Section 115BBH charging the gain above that value on sale. The Act does not address DeFi rewards directly.
Borrowing rupees or stablecoins against a coin you keep is not obviously a transfer of that coin, and nothing has been clarified. Two parts of the same arrangement are clearer. Where the collateral is liquidated, the coin has left you and that is a disposal charged under Section 115BBH. Where you spend or swap what you borrowed, that leg is charged on its own terms.
Worked example
- 1 BTC pledged, cost of acquisition ₹22,00,000
- Borrowed ₹8,00,000 of USDT against it
- Market falls and the collateral is liquidated at ₹26,00,000
- Gain on the forced disposal: ₹4,00,000
- Tax ₹1,20,000 plus cess ₹4,800
₹1,24,800 due on a sale you did not choose to make.
It defers a decision rather than removing a charge. The coin still carries its original cost and date, so the gain is intact and lands whenever the coin eventually moves, including through a liquidation. Interest paid on the loan is not deductible against the VDA gain, because Section 115BBH allows the cost of acquisition and nothing else.
Not clarified. Wrapping produces a different token that represents the original, which raises the same transfer question as a pool deposit does. This page states no answer. Keep the wrap and unwrap records with dates and values so whichever treatment applies can be computed later.
Investors, traders and business income
The head of income does not change the 30%. It changes the form, the schedules and the audit question.
It points that way without deciding it. Frequency, volume, holding period and whether borrowed funds were used are the facts that place VDA activity under business income rather than capital gains. The 30% under Section 115BBH is the same either way, so what shifts is ITR-3 and the schedules that come with it.
Not settled. Whether a crypto derivative is itself a virtual digital asset under Section 2(47A) has not been clarified, and the common reading puts the result in Schedule BP as business income rather than in Schedule VDA as a transfer. That changes the head and the form, so confirm it with a chartered accountant.
Worked example, on the common reading
- Spot gains for the year: ₹1,00,000 into Schedule VDA at 30%
- Tax ₹30,000 plus cess ₹1,200
- Futures profit for the year: ₹40,000 into Schedule BP
- Taxed at your slab rate rather than at 30%
One return, two computations, and ITR-3 rather than ITR-2.
On the common reading they sit under different heads, so the ordinary set-off rules govern the derivative side while Section 115BBH blocks set-off on the VDA side. That means a futures loss does not reduce a Schedule VDA gain. The underlying classification is unclarified, so this is a reading rather than a rule.
Section 44AB is the audit provision and it turns on turnover or gross receipts from business or profession. Whether VDA activity counts toward that turnover, and how turnover is measured for it, has not been clarified for crypto. Where the answer decides your filing, it belongs with a chartered accountant before the due date rather than after.
Not against the VDA gain. Section 115BBH(2)(a) allows the cost of acquisition and nothing else, and that restriction does not lift because the head of income changed. Subscription costs, terminals, internet and salaries do not reduce a Schedule VDA figure.
No. Each leg is its own transfer with its own consideration and its own FIFO match, and the pair of them is not netted into a single spread. Thin margins and high volume are exactly the shape that produces a large TDS balance against a small gain.
There is no intraday concept for VDAs. Buying and selling within the same day is still a transfer charged under Section 115BBH at 30% plus cess, matched by FIFO like any other disposal. The speculative business treatment that applies to intraday equity does not carry across.
Losses, set-off and carry-forward
A crypto loss is reported and then does nothing. That is the design, not an oversight.
Each loss making disposal still goes into Schedule VDA as its own row, carrying its acquisition date, transfer date, cost and consideration. It is reported, it just does not reduce anything. Section 115BBH blocks set-off against other VDA gains and against every other head of income.
No, not even inside crypto. Ten profitable trades and ten losing ones in the same year means the tax is computed on the profitable ten.
Worked example
- Gains across profitable trades: ₹2,00,000
- Losses across the rest: ₹1,80,000
- Economic profit for the year: ₹20,000
- Taxed on ₹2,00,000, not on ₹20,000
- Tax ₹60,000 plus cess ₹2,400
₹62,400 due on ₹20,000 of real profit.
No. Section 115BBH allows no carry-forward, so a loss that cannot be used in the year it arose is gone. That is the opposite of an equity capital loss, which carries forward for eight assessment years.
No. Section 115BBH allows the cost of acquisition and nothing else. Trading fees, the GST charged on those fees, network gas, transfer charges and interest on borrowed funds are all money spent, and none of them reduce the taxable gain.
Worked example
- Bought for ₹1,00,000, plus ₹500 of fees
- Sold for ₹1,20,000, plus ₹600 of fees
- Cost of acquisition allowed: ₹1,00,000
- Gain: ₹20,000, tax ₹6,000 plus cess ₹240
₹6,240 due. The ₹1,100 of fees changes nothing.
No. The deduction runs on the consideration regardless of the outcome, so a loss making sale is still withheld against. The credit is claimed in the return and refunded where it exceeds your liability for the year.
The usual lever is absent. Selling a losing coin to book the loss achieves nothing under Section 115BBH, because that loss sets off against nothing and does not carry forward. Any planning question beyond that belongs with a chartered accountant.
The Act carries no provision for a platform failure and CBDT has published nothing on it. What can be said from the statute is that a balance you cannot access has not been transferred, so no gain arises from the failure itself, and Section 115BBH offers no route to relieve the cost. Recoveries and settlements are fact specific and belong with a chartered accountant.
Not by choosing. FIFO matches each disposal to the oldest unsold lot, so the cost that attaches to a sale is decided by purchase order rather than by preference. Where lots sit on different exchanges, they still form one queue, which is why a per-exchange report and a return can disagree.
How to file crypto taxes
The mechanics of getting crypto into the return, and the dates that bound it.
Collect every disposal with its acquisition date, transfer date, cost of acquisition, sale consideration in rupees and the TDS deducted. Read your AIS and Form 26AS first. File ITR-2, or ITR-3 where there is business income, and enter each disposal as its own Schedule VDA row. Claim the TDS credit, pay the balance as self assessment tax under Section 140A, then verify within 30 days.
The disposals still go in. Schedule VDA is a record of transfers rather than of profits, so a break-even or loss making year is still a filled schedule. Filing it is also how the TDS already withheld from you comes back.
Worked example
- Sale consideration for the year: ₹3,00,000
- Cost of acquisition: ₹3,20,000
- Loss: ₹20,000, so no tax arises
- TDS already withheld: ₹3,000
₹3,000 refundable, and only if the return is filed.
For AY 2026-27 the due date is 31 July 2026 for individuals with no audit and 31 October 2026 for audit cases. A belated return under Section 139(4) can be filed until 31 December 2026, carrying a fee under Section 234F, with interest running separately on unpaid tax.
ITR-3 on the common reading, since derivative results are treated as business income rather than as a VDA transfer. Spot disposals still go into Schedule VDA inside the same form. Whether a crypto derivative is itself a virtual digital asset has not been clarified.
One for every disposal, because the schedule carries no summary line. A year of two hundred sales is two hundred rows, each with its own acquisition date, transfer date, cost and consideration. That is the single reason crypto filing takes longer than the rest of an ordinary return.
Per disposal: date of acquisition, date of transfer, cost of acquisition, sale consideration in rupees and the TDS deducted. For a peer to peer trade add the chat record, the order identifier, the counterparty details the platform gave you and the bank reference. A purchase lot you cannot evidence costs you 30% of what you paid for it.
An unevidenced cost is a cost the department can decline to allow, which pushes the taxable gain up toward the whole sale value. The gap is not a rounding difference.
Worked example
- Sold for ₹5,00,000
- With evidence of a ₹3,00,000 purchase: gain ₹2,00,000, tax and cess ₹62,400
- With no evidence at all: gain treated as ₹5,00,000, tax and cess ₹1,56,000
₹93,600 of difference resting on a purchase record.
The Act carries a revised return route under Section 139(5), and an updated return route where the ordinary window has closed. Which one is open to you turns on the assessment year and the dates, so confirm it with a chartered accountant rather than from a general page.
Yes. TDS is an advance against the liability, not a substitute for the return, and it is usually withheld on far more than you owe. Filing is what claims the credit, settles any balance and starts the refund.
A submitted return is not a filed return. Verification is due within 30 days of submission, through Aadhaar OTP, net banking or a digital signature, and a return that is not verified in that window is treated as never filed.
Your own trades, computed the same way
Upload your exchange files. The engine runs FIFO across all of them together and writes the Schedule VDA rows.
- CoinDCX
- WazirX
- Binance
- Bybit
AIS, Form 26AS and mismatches
The department already holds a version of your trading year. Most crypto notices start where that version and the return disagree.
Because the AIS carries gross sale consideration across every transfer, and your return carries the gain. Turning the same capital over repeatedly multiplies the first figure without moving the second, so a modest account can show a very large AIS total. Nothing has gone wrong, but the gap has to be explainable.
Worked example
- Capital deployed: ₹5,00,000
- Traded in and out repeatedly through the year
- Total sale consideration reported: ₹51,00,000
- Actual net gain: ₹1,20,000
- Tax ₹36,000 plus cess ₹1,440
₹51,00,000 in the AIS against ₹37,440 of tax. Both are correct.
Form 26AS is the tax credit statement, so it shows what was deducted and deposited under your PAN. The AIS is broader and carries reported transactions including VDA transfers. Claim TDS credit against Form 26AS, and reconcile transaction counts and values against the AIS.
The portal carries a feedback route against each AIS entry for exactly this, and using it before the return is filed is easier than explaining the same gap afterwards. Record what you submitted and when, because the response becomes part of the trail if the entry is raised later.
The two measure different things, so equality is not the target. What matters is that the difference is explained by something real, such as gross consideration against net gain, cost of acquisition, transfers between your own accounts, or an entry reported against the wrong period. An unexplained difference is what gets asked about.
An exchange statement records what it deducted, and Form 26AS records what reached the government under your PAN. Timing, PAN mismatches and deposit failures all produce a gap. Only the Form 26AS figure can be claimed as credit.
Yes, because a notice is often triggered by an unexplained gap rather than by an error. Where the AIS shows gross consideration and the return shows a gain, the difference can look like unreported income until the working behind it is produced. A per-trade schedule is what closes that gap.
No. The obligation to report a transfer does not depend on whether the department already knows about it, and coverage is uneven across venues and periods. From 1 April 2026, Section 509(1) puts crypto platforms among the prescribed reporting entities filing user level statements, so the direction is toward more data rather than less.
What your exchange reports about you
Your trade history reaches the department from two directions. The return is only one of them.
Indian platforms already deduct the 1% under Section 194S and deposit it against your PAN, which puts the transfer into Form 26AS and the AIS. From 1 April 2026, Section 509(1) of the Income Tax Act 2025 goes further and puts crypto exchanges and comparable platforms among the prescribed reporting entities that file user level transaction statements.
Section 509(1) requires a user level statement of transactions from prescribed reporting entities, and Section 446 attaches a penalty where such a statement arrives late or carries inaccurate particulars. That gives the department a description of your year that does not come from you, which is a good reason for the two to agree.
Not through Section 194S, which is why offshore trades often leave no TDS trail. The route is different: CARF begins moving crypto account data between tax authorities from April 2027. Until then the absence of a report is a gap in visibility rather than a change in what you owe.
The reporting obligation may end with the platform, but yours does not. Export your full trade history, deposits, withdrawals and TDS statements while access lasts, because reconstructing a purchase lot after the fact is the expensive kind of problem. A cost you cannot evidence is a cost the department can decline to allow.
Bank credits and high value transactions have their own reporting routes, quite apart from anything the exchange files. A crypto sale can therefore appear from two directions, once as a transfer and once as a bank credit, which is why the two need a common explanation.
A coin for coin swap is a transfer of a virtual digital asset, so it sits inside the same deduction and reporting machinery as a rupee sale. The absence of a rupee leg does not put it outside Section 194S or outside a platform statement.
Types of income tax notices
What each notice is for, stated from the provision. Time limits and amounts turn on facts and dates, so this page states none of them.
It is the automated processing summary of a filed return, comparing what you reported against what the department already holds and arriving at a tax payable, a refund, or nil. It is not an assessment and it is not an accusation. Where the arithmetic in it is wrong, the Act provides a rectification route, and the timing of that route is date specific.
It opens a scrutiny assessment, which means the return has been selected for detailed examination rather than automated processing. The time limits and the scope depend on the assessment year and on how the case was selected, so this page states no figure. A per-trade schedule with dates, costs and consideration is the document such an examination asks for.
It is a request for information, accounts or documents, and it can also require a return where one was not filed. It is a preliminary step rather than a finding. What it usually needs from a crypto holder is the underlying trade history rather than a summary.
It says the return as filed is incomplete or internally inconsistent rather than wrong on the tax. For a crypto filer, a Schedule VDA that does not line up with the income figures elsewhere in the return is the common cause. The correction window and the consequence of missing it are date specific and belong with a chartered accountant.
Reassessment, meaning a year already closed is being reopened because information suggests income escaped assessment. Section 148A is the preceding step, where the department puts the information to you and considers your reply before deciding to reopen. A large gross AIS figure against a small declared gain is one pattern that produces these for crypto holders.
It states an amount determined as payable following an order, and it is a demand rather than an inquiry. Verifying it against the order that produced it, and against the Document Identification Number the portal exposes, is the first step. Payment timelines and consequences are date specific.
It is the route by which a refund otherwise due to you is set against an outstanding demand from an earlier year, after an intimation of the proposed adjustment. For a crypto holder this often surfaces as an expected TDS refund that does not arrive in full.
Section 133(6) is a power to call for information, and it can be exercised against a third party such as a platform or a bank rather than against you. Section 131(1A) is a summons power, which can require personal attendance and the production of documents. Both are investigative rather than a determination of tax.
Every genuine communication carries a Document Identification Number, and the e-filing portal exposes a route to authenticate a notice against it. Doing that before responding is worth the two minutes, because notice-shaped phishing is common around filing season.
Penalties, interest and undisclosed holdings
The penalties are the ordinary ones, sitting in the sections that govern any other default.
Section 271C sets a penalty equal to the tax that should have been deducted. Section 276B is separate and addresses tax that was deducted and then not paid to the government, carrying rigorous imprisonment of three months to seven years and a fine, and it does not apply where the amount reaches the government before the quarterly statement for that period falls due.
Worked example
- You buy ₹1,00,000 of USDT peer to peer
- 1% that should have been withheld: ₹1,000
- Penalty under Section 271C: ₹1,000
₹2,000 out of pocket on a duty that cost ₹1,000 to discharge on time.
Finance Act 2025 inserted virtual digital assets into the definition of undisclosed income in Section 158B, so crypto found during a search is assessed for the whole block period rather than for a single year, and Section 113 taxes that block income at 60% with surcharge on top. This is not the rate that applies to ordinary trading.
It is a separate question from the VDA charge, and a more expensive one. Where a credit or an asset cannot be explained, the unexplained income provisions apply instead, and Section 115BBE charges such income at 60% with no deduction allowed against it. Paying 30% on a gain does not answer the question of where the capital behind it came from.
Tax on a VDA gain runs through the advance tax instalments like any other tax. A large gain realised early in the year and paid only at filing collects interest under Sections 234B and 234C even where the return itself is on time.
The mechanics are the ordinary ones. A return filed after the due date is belated under Section 139(4) and carries a fee under Section 234F, with interest running separately on unpaid tax. Nothing in Section 115BBH adds to that.
There is an updated return route for a year whose ordinary window has closed. Whether it is open for your assessment year, and what it costs in additional tax, is date specific, so take it to a chartered accountant rather than acting on a general page.
That Act addresses undisclosed foreign income and foreign assets, and whether a balance held with an offshore crypto platform is a foreign asset within it turns on how the holding is characterised. It is contested and this page states no answer. The consequences under that Act are severe enough that the question belongs with a chartered accountant rather than a general page.
Losing the purchase records. Everything else on this page is a rule you can plan around, but an unevidenced cost of acquisition converts a gain you actually made into a gain the size of the whole sale, and Section 115BBH offers no other deduction to fall back on.
Offshore platforms and non residents
The rate does not move with the venue or with where you live. What moves is scope and reporting.
For a resident, yes. Residence brings worldwide income into scope, so a gain made on an offshore platform is charged at the same 30% plus cess under Section 115BBH. The venue changes who withholds and who describes the trade to the department, not the rate.
Worked example
- Gain on an offshore platform: ₹90,000
- Tax at 30%: ₹27,000
- Cess at 4%: ₹1,080
- TDS withheld by the platform: none
₹28,080 due in full at filing, with no credit sitting in Form 26AS to reduce it.
The deduction duty does not disappear because the venue sits outside India. Where no platform withholds, the obligation falls where the Act puts it rather than lapsing, and the practical result is that nothing appears in Form 26AS to credit at filing. How the duty is discharged on a specific platform is a question for a chartered accountant.
The direction of travel is settled. From 1 April 2026, Section 509(1) of the Income Tax Act 2025 puts crypto exchanges and comparable platforms among the prescribed reporting entities that file user level transaction statements, and CARF begins moving offshore account data between tax authorities from April 2027.
It can fall inside it. Schedule FA covers foreign assets held by a resident, and whether a balance sitting with an overseas platform is characterised that way turns on facts rather than on a rule, so it belongs with a chartered accountant. Section 115BBH applies to the gain either way.
Yes. Section 194S is not waived for a non resident, and the credit appears against the same PAN in Form 26AS and the AIS. The form is ITR-2, or ITR-3 once business income is in the picture, with disposals going into Schedule VDA trade by trade.
Section 6 counts days in India to fix your status, and a non resident is taxed on what is received, accrues or arises in India. A gain made on an Indian exchange, or on crypto sold to an Indian buyer, is Indian source income and Section 115BBH applies at the same 30% plus cess.
India has double taxation agreements with many countries, but whether one covers a VDA gain, and which article reaches it, is a fact specific reading rather than a rule. This page states no answer for a particular treaty.
Residence moves the line rather than erasing what came before. Worldwide income enters scope from the year the Section 6 day count is met, which is the point at which holdings built up abroad start mattering to an Indian return. The day count in a year of arrival, treaty relief, and the reporting position on a foreign platform balance are all questions for a chartered accountant.
Minors, HUFs, employees and inheritance
Situations where the 30% is settled but the person it attaches to is the question.
Income arising to a minor is generally clubbed with a parent's income under Section 64(1A), so the VDA gain is charged at 30% plus cess in the parent's return rather than escaping because of the child's age. Exchange accounts usually require an adult's PAN in any event, and the PAN the trade is reported against is the PAN the department will ask about.
A Hindu Undivided Family is its own person for income tax with its own PAN, so VDA gains arising to it are charged at 30% plus cess in the HUF's return. Section 115BBH does not carve out any entity, so the restrictions on set-off and deduction apply the same way there.
Property received under a will or by inheritance is outside the Section 56(2)(x) charge, so receiving it is not the taxable moment. Selling it is. What has not been clarified for VDAs is whose cost of acquisition attaches to the inherited coin, and Section 115BBH allows only a cost of acquisition, so that question decides the bill. Take it to a chartered accountant with the original purchase records if they exist.
Salary alone would sit in ITR-1, but VDA disposals do not, so a salaried filer with crypto moves to ITR-2, or ITR-3 where there is business income. Form 16 covers the salary side only; the Schedule VDA rows have to be built from your own trade history.
No. Salary withholding covers your salary, and Section 194S withholding attaches to the VDA transfer through the platform or the counterparty. They are separate machinery, and a balance can still be payable at filing even where both have operated correctly.
The department starts from the PAN the account and the reporting sit against, so a shared account puts the whole figure in one person's hands until something shows otherwise. Untangling it after a notice is far harder than keeping separate accounts, and the answer in a specific case belongs with a chartered accountant.
Section 115BBH charges a VDA gain without carving out any class of person, so the flat rate and the restrictions on set-off and deduction apply there too. What differs is everything around it, from the return form to audit and to the treatment of the entity's other income.
GST charged on trading fees
A different tax under a different law, reaching the platform's service rather than your asset.
There is no crypto specific GST notification behind the charge you see. What is taxed is the platform's service, so 18% attaches to the trading fee as the residual rate for services with no entry of their own. GST on the underlying token, rather than on the fee, remains an open question.
Worked example
- Trading fee charged by the platform: ₹1,000
- GST at 18% on the fee: ₹180
- Total charged: ₹1,180
None of the ₹1,180 reduces your taxable gain.
No. Section 115BBH allows the cost of acquisition and nothing else, so the fee and the GST charged on it are both money simply spent. Neither reduces the 30%.
Several have been applying it to Indian users, with the line appearing on Indian invoices from July 2025. It is a charge from the platform on its own invoice and it sits outside your income tax computation entirely.
No. Your gain is not touched by it, so nothing about the 30% computation moves. CryptoKar computes the income tax side. GST on your platform fees is between you and the platform, and it appears as its own line on the invoice.
Registration turns on making taxable supplies, and buying and selling coins for your own account is not obviously that. It becomes a real question where you are supplying a service, such as running a desk or earning commission. That is a GST practitioner's call rather than something this page decides.
On the platform's invoice or fee statement rather than in the tax report. Since none of it is deductible against the VDA gain, it does not enter Schedule VDA at all, and CryptoKar does not compute it.
Beliefs that create the biggest bills
Every one of these has produced a notice for someone. They are wrong in the same direction.
No, and this is the single most expensive belief in Indian crypto. Section 115BBH charges a transfer, and a swap, a stablecoin conversion and a purchase paid for in coins are all transfers. Tax attaches at the trade, not at the bank.
Worked example
- BTC bought for ₹3,00,000, swapped for ETH worth ₹4,20,000
- Nothing withdrawn to the bank
- Gain: ₹1,20,000
- Tax ₹36,000 plus cess ₹1,440
₹37,440 due in a year where the bank account never moved.
No. Section 115BBH has no minimum, so a ₹300 gain is charged at 30% plus cess like any other. The only threshold in this area belongs to the 1% deduction under Section 194S, and crossing it or not does not change what you owe.
The wallet is not the trail. Money moving in and out of it is, and so is the exchange leg at either end. From 1 April 2026, platform statements under Section 509(1) describe your trades directly, and where funds cannot be explained, the unexplained income provisions apply rather than the 30%.
No. For a resident, the charge follows the person rather than the venue, so the gain is taxed at the same 30% plus cess. What the offshore venue removes is the TDS credit sitting ready in Form 26AS, which usually makes the amount payable at filing larger, not smaller.
No. Set-off is switched off, so losing trades do not reduce winning ones, and there is no summary line in Schedule VDA to enter a net figure into. The return is built disposal by disposal, and the tax is computed on the gains alone.
It settles the charge on the gain. It does not explain where the capital came from, and that is a separate question with its own provisions and a far higher rate. Records that show the source of funds do a different job from records that show the cost of acquisition.
Very little exists by design. Section 115BBH allows one deduction, the cost of acquisition, and switches off set-off and carry-forward, so the usual levers are absent. What remains is accurate cost basis and complete records, since a purchase lot you cannot evidence costs you 30% of what you paid for it. Anything beyond that is a question for a chartered accountant.
What CryptoKar does with your files
What the engine computes from an uploaded trade history, and where it stops.
Yes. The engine runs FIFO in one chronological pass over every file you upload, matching each disposal to the oldest unsold lot, and writes per-trade rows carrying acquisition and transfer dates rounded the way the form expects. You get them as a PDF or an Excel file.
By purchase date, oldest first, across your whole history rather than per exchange. A sale larger than the oldest lot takes what is left of it and moves on to the next one, which is where a per-exchange report and a return usually start to disagree.
Worked example
- 12 May: bought 1.0 ETH for ₹2,00,000
- 4 Aug: bought 1.0 ETH for ₹2,60,000
- 19 Jan: sold 1.5 ETH for ₹4,80,000
- FIFO cost: ₹2,00,000 plus half of ₹2,60,000, so ₹3,30,000
- Gain ₹1,50,000, tax ₹45,000 plus cess ₹1,800
₹46,800, less the ₹4,800 of TDS already withheld on the ₹4,80,000.
No. It computes the figures and exports them for you or your accountant to work from. It does not connect to the e-filing portal and it does not submit anything on your behalf.
CSV and XLSX files from CoinDCX, WazirX, Binance and Bybit. There is no wallet import, no on-chain history and no exchange API sync. Parsing runs in your browser, and the parsed transactions are stored in an encrypted database.
The TDS recorded in your exchange files is pulled out and set against the liability the engine computes. Match the final figure against Form 26AS before you claim it, since only what the deductor actually deposited can be credited.
Yes. Futures and options results are tracked as business income, apart from the spot capital gains that fill Schedule VDA. That mirrors the common reading on derivatives, which has not been clarified by CBDT.
That is the point of running the engine over all of them at once. FIFO needs one chronological queue across your whole history, so a lot bought on one platform can be the lot matched against a sale on another, and only a combined pass gets that right.
Plans start at ₹499 / FY for up to 100 transactions, priced per financial year rather than as a subscription. The free tier covers upload, portfolio and tax calculation, and the report download is the paid boundary.
This page states the law and what CryptoKar computes from your trade history. It is not tax advice. Judgment calls belong with a chartered accountant. Sections and dates here were read against the source on 23 August 2026.
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