Crypto Tax Glossary

Four terms decide how India taxes crypto: a virtual digital asset is what you hold, Section 115BBH is the 30% charge on transferring one, Section 194S is the 1% withheld at the transfer, and Schedule VDA is where the trade is reported. Each entry below states the definition first, then the section it comes from.

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Key highlights

Every term below resolves into one of these four figures.

30%

Flat tax on a VDA gain

Section 115BBH

Cess, which runs on the tax figure rather than the gain

Levied by the annual Finance Act

Withheld from the sale value at the transfer

Section 194S

One row

Per disposal in the return, with no summary line

Schedule VDA

The Term for a Crypto Asset

One definition decides whether the rest of the rules reach what you hold, and two more decide what the gain on it comes to.

The Sections That Charge the Tax

Two sections do the charging: one sets the rate, the other takes a slice at the moment of the trade. The rest set what a gift costs you, what a platform now reports about you, and what a default costs when the department finds it.

The Forms You Report It On

The computation ends in schedules inside your return, and crypto touches more than one of them depending on how the income arrived.

How These Terms Fit Together

The four terms are not four separate rules. They are one sequence, and a single trade touches all of them. You hold something the Act calls a virtual digital asset. You transfer it, which is the event that matters, and 1% comes off the consideration at that moment. The gain then meets the 30% charge, cess is added on the tax, and the whole thing lands as one row in your return.

Total liability is ₹18,720. The ₹2,000 already withheld under Section 194S is a credit against it, not an extra charge, so ₹16,720 is what you actually pay at filing.

The order matters because the 1% is withheld on the sale value while the 30% is charged on the gain, so a loss-making trade still has TDS deducted from it. Run the full sequence over a real trade history on the India crypto tax page, which covers FIFO cost basis, the transaction types and the filing dates.

Frequently Asked Questions

Three questions that come before any single definition does.

Three do the work. Section 2(47A) defines a virtual digital asset, Section 115BBH taxes the gain on transferring one at a flat 30% plus 4% cess, and Section 194S takes 1% at source from the consideration. The reporting sits in Schedule VDA inside ITR-2 or ITR-3.

The definition of a virtual digital asset is in Section 2(47A), the definitions clause of the Income-tax Act, not in the crypto tax provisions themselves. Everything else, the 30% charge and the 1% deduction, refers back to that one definition.

The terms survive the renumbering and so do the figures. What changed on 1 April 2026 is set out in full on the India crypto tax page.

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 21 August 2026.

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