Crypto Taxes in India

The Act calls it a virtual digital asset and defines the term in Section 2(47A). Coins, stablecoins, non-fungible tokens and airdropped tokens all sit inside it. Rupees and foreign currency do not, and neither do vouchers or reward points, so the cash balance in your exchange wallet stays out. Transfer anything inside the definition and Section 115BBH applies to the gain.

The list is open at both ends, since the Central Government can notify assets in and out of it. The construction of the clause, the full scope list and the notification power are set out in the virtual digital asset glossary entry.

Take your sale consideration, subtract what the asset cost you, and tax the difference at 30% under Section 115BBH, which the glossary reads part by part. That rate is flat. It does not move with your income slab, so a ₹4,000 gain and a ₹40 lakh gain carry the same percentage, and the basic exemption limit shelters none of it. Health and education cess of 4% then applies to the tax figure rather than to the gain, which is why a ₹30,000 gain produces ₹9,000 of tax and ₹360 of cess instead of ₹1,200.

A transfer is the trigger. Selling for rupees is one, swapping one coin for another is a second, and paying a merchant in crypto is a third. Buying and holding triggers nothing, and moving your own coins between your own accounts triggers nothing either. Surcharge sits on top at higher total incomes and follows the ordinary surcharge slabs, so 30% is the floor rather than the whole story for large filers.

Average the two buys instead and the cost comes to ₹3,45,000, which would put the gain at ₹1,35,000 and the liability ₹4,680 lower. The method decides the bill. FIFO produced ₹1,50,000 here, and the 0.5 ETH still in inventory keeps its ₹1,30,000 cost until you sell it. These are the rules the engine applies, in the order it applies them, on the same Decimal arithmetic. For a single trade rather than a chain, the calculator does the short version.

A gift from a relative as defined in the Act is exempt regardless of value. The ₹50,000 line applies to gifts from everyone else, and it is an aggregate for the year rather than a per-gift allowance.

Two rows surprise people. Donating a coin is a transfer, so the gain up to the day you gave it away is taxed at 30% even though nothing came back to you, and a donation made in kind does not carry a deduction under Section 80G. Paying for something with crypto is a transfer for the same reason: the merchant received the coin, so the gain over your cost crystallises at that moment and the price of the goods is your sale consideration.

Three rows in that table rest on practice rather than statute. Slab rate on receipt for a staking reward or an airdrop is where most practitioners land, and CBDT has issued nothing on it. Mining sits further out again, because Section 115BBH(2)(a) allows the cost of acquisition and nothing else, and a coin you mined has no acquisition cost, which points at the whole consideration being taxed at 30% rather than at a slab rate when it arrives. Both readings are live. Liquidity and governance rewards from DeFi protocols carry the same uncertainty and one more on top, since depositing into a pool may itself be a transfer depending on what you receive back.

Derivatives carry a separate open question. Whether a crypto future or option is itself a VDA under Section 2(47A) has not been clarified, which is what leaves the TDS column unresolved for that row. CryptoKar tracks derivatives P&L separately as business income.

CryptoKar computes the Section 115BBH side of this table. Reward, airdrop and salary income at slab rate is not something the engine values for you, so those figures come from your own records or your accountant.

Buying with rupees only sets a cost and a date against the lot. Holding through a full cycle of the market changes nothing until you sell. Moving coins from an exchange to your own wallet is not a transfer either, since the beneficial owner has not changed, though the movement still has to be recognisable in your records or FIFO will read it as a disposal and invent a gain.

Gifts run on Section 56(2)(x) rather than on Section 115BBH. A gift from a relative as the Act defines the 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 the ₹50,000 line applies, and it is an aggregate across the year rather than a per-gift allowance, so five gifts of ₹15,000 from friends cross it. Cross the line and the whole amount is income at your slab rate on the day it arrives. Section 115BBH still takes over on the day you sell it.

TDS under Section 194S is 1% of the consideration, not 1% of the gain. Sell ₹4,80,000 of ETH at a loss and ₹4,800 still comes off. On an Indian exchange the platform deducts it and deposits it. In a peer-to-peer trade the buyer deducts. In a coin-for-coin swap both sides are handing over a VDA, so each side is buyer and seller at once and both deduct, which is the part most people miss. CBDT Circular 14/2022 sets out that mechanism and the exchange route that replaces it when the trade happens on a platform.

For FY 2025-26 the thresholds are settled. Deduction starts once your VDA consideration crosses ₹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 are annual figures. For the one-line version, see Section 194S in the glossary.

GST is a different tax under a different law, and it reaches the service rather than the asset. An exchange charging you a trading fee is supplying a service, so GST applies to that fee at the standard 18% rate for services with no entry of their own. Offshore platforms serving Indian users have been applying it too, with several adding the line to Indian invoices from July 2025.

Two things follow. Your gain is not touched by GST, so nothing about the 30% computation changes. And the fee that carried the GST is not deductible against that gain either, because Section 115BBH allows the cost of acquisition and nothing else, which means the fee and its GST are both money you simply spent.

FIFO means first in, first out. Each disposal is matched to the oldest lot of that asset you still hold, and the pool is per asset rather than per exchange. Buy ETH on CoinDCX in May, buy more on WazirX in August, sell in January, and the May lot is consumed first even though the sale happened somewhere else entirely. The worked example above shows that match lot by lot.

That has a practical consequence. No single exchange can hand you a correct cost basis, because the oldest lot may be sitting in an account it cannot see. A report built from one platform alone produces a different cost basis, in either direction, and one that cannot be reconciled to your return. Moving coins between your own accounts changes nothing: a self-transfer relocates a lot, it does not consume one.

Partial lots are the other place the arithmetic slips. Selling 1.5 ETH out of two 1 ETH lots splits the second lot, and the surviving half carries its own cost forward until you sell it. CryptoKar tracks those fractions in Decimal rather than floating point, so a lot split five times still adds back to what you paid. A lot with no acquisition record has no cost to deduct, which turns the entire sale consideration into gain.

Two of these rungs belong to the buyer rather than the seller, which is what makes peer-to-peer trading awkward. Where you are the one paying for a coin, the deduction duty is yours. Section 271C sets a penalty equal to the tax that should have been deducted, so failing to withhold ₹1,000 on a ₹1,00,000 purchase costs ₹1,000 on top of the ₹1,000 itself. Section 276B is a prosecution provision rather than a penalty one and it addresses a different failure, tax that was deducted and then not paid to the government. It carries 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.

The last rung is newer. 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 one year, and Section 113 taxes that block income at 60% with surcharge on top. This is not a rate that applies to trading. It applies to holdings and gains that were never declared and are then discovered, and it reaches back across the block period rather than at the year in question.

Interest runs separately from all of it. Tax on a VDA gain is due through the advance tax instalments like any other tax, so a large gain realised early in the year and settled only at filing collects interest under Sections 234B and 234C even where the return itself is on time.

A peer-to-peer trade leaves you holding the entire evidence burden. Bank credits arrive from a stranger rather than from a regulated venue, and where the counterparty and the trade behind a credit cannot be shown later, the amount is open to being treated as an unexplained credit rather than as sale proceeds. The difference matters, because unexplained income is not taxed at 30%. Keep the chat record, the order identifier, the counterparty details the platform gave you and the bank reference against every leg.

Offshore holdings raise a second question this page cannot answer for you. A balance with a platform outside India may be reportable in Schedule FA of the return depending on how the holding is characterised, and that turns on facts rather than on a rule, so it belongs with a chartered accountant. What is settled is the direction of travel. Platform statements begin on 1 April 2026 under Section 509(1), and CARF starts moving offshore data between tax authorities from April 2027.

Where there is Indian taxable crypto income the form is the same one a resident uses, ITR-2 for a plain investment year and ITR-3 once business income is in the picture, with the disposals going into Schedule VDA trade by trade. The 1% under Section 194S is not waived for a non-resident either, so the credit shows up in the same place, against the PAN.

Returning to India moves the line rather than erasing what came before. Residence brings worldwide income into scope from the year the day count is met, which is the point at which holdings built up abroad start mattering to an Indian return. Treaty relief, the day count in a year of arrival or departure, and the reporting position on a foreign platform balance are all questions for a chartered accountant, and this page states no answer for them.

The substantive change is who else describes your trades to the department. Section 509(1) puts crypto exchanges and comparable platforms among the prescribed reporting entities that must file user-level transaction statements, and Section 446 attaches a penalty where such a statement arrives late or carries inaccurate particulars. Your trade data now reaches the department from two directions, your return and the platform statement, which is a good reason for the two to agree.

One figure this page will not state. The 1% deduction sits in Section 393(1) from FY 2026-27, and whether the ₹10,000 and ₹50,000 thresholds carry across is not something we can confirm from the statutory text today, so we leave it blank rather than borrow a number from commentary.