India Crypto Tax 2026: Guide to 30% VDA Tax, TDS & ITR Filing
Key Takeaways
- India has collected ₹1,095.80 crore in crypto TDS over three financial years (FY23, FY24, FY25)
- FY 2024-25 TDS collection reached ₹511.83 crore — a 41 percent increase from FY24
- Maharashtra leads with ₹293.40 crore (57%) of FY25 TDS, followed by Karnataka at ₹133.94 crore
- Government issued 44,000 tax notices to crypto traders for non-disclosure of gains
- Tax authorities uncovered ₹888.82 crore in undisclosed crypto income through enforcement actions
What You Need to Know
India taxes cryptocurrency gains at a flat 30 percent rate under Section 115BBH of the Income Tax Act, regardless of holding period or income type. Additionally, a 1 percent Tax Deducted at Source (TDS) under Section 194S applies to all crypto transactions exceeding ₹50,000 for specified persons or ₹10,000 for others.
The Indian government has collected ₹1,095.80 crore in crypto TDS over three years: ₹221.27 crore in FY23, ₹362.70 crore in FY24, and ₹511.83 crore in FY25. This implies total trading volumes exceeding ₹58,000 crore during this period.
Maharashtra and Karnataka together account for over 80 percent of India’s crypto trading activity. Tax authorities have intensified enforcement, issuing 44,000 notices to traders who failed to disclose crypto gains and uncovering ₹888.82 crore in unreported income.
Key restrictions include: no loss set-off against other income, no carry-forward of losses, and only acquisition cost can be deducted. Crypto gains must be reported in Schedule VDA of ITR-2 or ITR-3 forms.
Overview
India’s cryptocurrency taxation framework, introduced in the 2022 Union Budget, imposes a 30 percent flat tax on all Virtual Digital Asset (VDA) gains plus 4 percent cess. The 1 percent TDS mechanism introduced under Section 194S has become the government’s primary tool for tracking the ₹50,000+ crore annual crypto trading market. This comprehensive guide covers the latest tax rates, collection data, filing requirements, and enforcement trends for FY 2024-25.
Crypto Tax Rates in India (FY 2024-25)
| Tax Type | Rate | Applicable Section | Details |
|---|---|---|---|
| Tax on Gains | 30% | Section 115BBH | Flat rate on all crypto profits + 4% cess |
| TDS on Transfers | 1% | Section 194S | Deducted by buyer at source |
| TDS Threshold (Specified) | ₹50,000 | — | For individuals/HUFs not in business |
| TDS Threshold (Others) | ₹10,000 | — | For businesses and professionals |
| Surcharge (if applicable) | 10-37% | — | Based on total income slabs |
TDS Collection by Year
The government’s TDS collection from cryptocurrency transactions has shown remarkable growth, crossing the ₹1,000 crore milestone in just three financial years.
| Financial Year | TDS Collected | YoY Growth | Implied Trading Volume |
|---|---|---|---|
| FY 2022-23 | ₹221.27 Cr | — | ₹22,127 Cr |
| FY 2023-24 | ₹362.70 Cr | +64% | ₹36,270 Cr |
| FY 2024-25 | ₹511.83 Cr | +41% | ₹51,183 Cr |
| Total (3 Years) | ₹1,095.80 Cr | — | ₹58,580 Cr+ |
How Trading Volume is Calculated: Since TDS is levied at 1 percent of transaction value, the implied trading volume equals TDS collected × 100. For FY25, ₹511.83 crore TDS implies ~₹51,183 crore in crypto trades.
State-wise TDS Collection (FY 2024-25)
Maharashtra and Karnataka dominate India’s crypto trading landscape, together contributing over 83 percent of the nation’s crypto TDS in FY 2024-25.
Top 5 States by TDS Collection
Tax Enforcement and Compliance
The Income Tax Department has significantly intensified its crypto tax enforcement activities, leveraging TDS data to identify non-compliant traders.
| Enforcement Metric | Amount/Count | Details |
|---|---|---|
| Tax Notices Issued | 44,000 | To traders who did not disclose crypto gains |
| Undisclosed Crypto Income (India) | ₹630 Cr | Detected through domestic operations |
| Undisclosed Foreign Crypto Income | ₹1,089 Cr | From offshore exchange investigations |
| Total Unreported Income Uncovered | ₹888.82 Cr | Cross-sector enforcement actions |
| TDS Lapses from Exchanges | ₹39.8 Cr | Identified during exchange surveys |
| Hidden Foreign Assets (Crypto included) | ₹29,208 Cr | FY25 Black Money Act crackdown |
Warning: Failing to disclose crypto gains can result in penalties up to 200 percent of tax evaded under Section 270A, plus interest charges. The 44,000 notices demonstrate active monitoring through TDS and exchange data.
What is Taxable and What is Not
Taxable Crypto Transactions (30% Tax)
- Selling crypto for INR: Profit from selling Bitcoin, Ethereum, or any VDA
- Crypto-to-crypto trades: Swapping BTC for ETH triggers tax on gains
- Using crypto for purchases: Paying for goods/services with crypto
- Receiving crypto as payment: For services rendered or goods sold
- Mining and staking rewards: Taxed at slab rates on receipt, 30% on sale
- Airdrops: Taxed as Income from Other Sources at slab rates
Not Taxable or Tax-Free
- Transfers between own wallets: Moving crypto between your wallets
- Gifts from close relatives: From spouse, siblings, parents, or lineal descendants
- Holding crypto: No tax until you sell or transfer
- Buying crypto with INR: Purchase itself is not taxable
How to Calculate Crypto Tax
The tax calculation is straightforward but strict — only the cost of acquisition can be deducted.
Formula
Taxable Gain = Sale Price - Cost of Acquisition
Tax Payable = Taxable Gain × 30% × 1.04 (including cess)
Example Calculation
| Item | Amount |
|---|---|
| Purchase Price (1 BTC in Jan 2024) | ₹35,00,000 |
| Sale Price (1 BTC in Dec 2024) | ₹88,00,000 |
| Taxable Gain | ₹53,00,000 |
| Tax @ 30% | ₹15,90,000 |
| Cess @ 4% | ₹63,600 |
| Total Tax Payable | ₹16,53,600 |
Key Restrictions
| Restriction | Impact |
|---|---|
| No Loss Set-Off | Crypto losses cannot offset salary, interest, or any other income |
| No Intra-Crypto Set-Off | Loss on ETH cannot offset gain on BTC |
| No Loss Carry-Forward | Losses expire in the same financial year |
| No Deductions | Transaction fees, gas fees, and platform charges cannot be deducted |
| No Indexation Benefit | Flat 30% regardless of holding period |
ITR Filing for Crypto (AY 2025-26)
Crypto gains must be reported in Schedule VDA of your Income Tax Return for Assessment Year 2025-26.
| Income Type | ITR Form | Schedule |
|---|---|---|
| Crypto gains as Capital Gains | ITR-2 | Schedule VDA |
| Crypto gains as Business Income | ITR-3 | Schedule VDA |
| Airdrops, Mining, Staking | ITR-2/3 | Income from Other Sources + Schedule VDA on sale |
What to Report in Schedule VDA
- Date of acquisition and transfer
- Head of income (Capital Gains or Business)
- Cost of acquisition
- Sale/transfer consideration
- Income from transfer (profit/loss)
Upcoming Changes (FY 2025-26)
New from FY 2025-26: Crypto exchanges and designated entities will be required to mandatorily report all transactions to the Income Tax Department, ensuring better compliance and transparency.
India vs Global Crypto Tax Comparison
| Country | Tax Rate | Loss Set-Off | Holding Period Benefit |
|---|---|---|---|
| India | 30% | No | No |
| USA | 0-37% | Yes ($3,000/year) | Yes (Long-term lower rates) |
| UK | 10-20% | Yes | No |
| Germany | 0% (if held >1 year) | Yes | Yes (Tax-free after 1 year) |
| UAE | 0% | N/A | N/A |
| Singapore | 0% | N/A | N/A |
Related Tools
Calculate your potential crypto profits and convert prices with our free tools:
- Bitcoin Profit Calculator – Calculate your BTC investment returns
- Ethereum Profit Calculator – Calculate your ETH investment returns
- BTC to INR Converter – Convert Bitcoin to Indian Rupees
- Bitcoin SIP Calculator – Plan systematic crypto investments
Frequently Asked Questions
What is the crypto tax rate in India for 2025?
India levies a flat 30 percent tax on all cryptocurrency gains under Section 115BBH, plus 4 percent health and education cess. This rate applies regardless of whether the income is classified as capital gains or business income. Additionally, 1 percent TDS is deducted on crypto transfers exceeding ₹50,000 (or ₹10,000 for businesses).
Can I offset crypto losses against other income in India?
No. Under Section 115BBH, crypto losses cannot be set off against any other income, including salary, interest, or rental income. Even losses from one cryptocurrency cannot offset gains from another. Losses also cannot be carried forward to future years.
How much TDS has India collected from crypto transactions?
India has collected ₹1,095.80 crore in crypto TDS over three financial years: ₹221.27 crore in FY23, ₹362.70 crore in FY24, and ₹511.83 crore in FY25. This implies total crypto trading volumes exceeding ₹58,000 crore during this period.
Which ITR form should I use to report crypto gains?
Use ITR-2 if reporting crypto gains as capital gains, or ITR-3 if reporting as business income. Both forms include Schedule VDA specifically designed for reporting Virtual Digital Asset transactions. You must declare the date of acquisition, transfer date, cost, sale consideration, and resulting income.
Is transferring crypto between my own wallets taxable?
No. Moving cryptocurrency between your own wallets (e.g., from an exchange to a hardware wallet) is not considered a taxable transfer. However, you should maintain records of such transfers for documentation purposes.
How are crypto airdrops and staking rewards taxed in India?
Airdrops, staking rewards, and mining income are taxed at your applicable income tax slab rates when received (as Income from Other Sources). When you subsequently sell these crypto assets, any gains are taxed at the flat 30 percent rate. The fair market value at receipt becomes your cost of acquisition.
What happens if I do not report crypto gains in my ITR?
The government has issued 44,000 tax notices to crypto traders who failed to disclose their gains. Penalties can include up to 200 percent of tax evaded under Section 270A, plus interest. The 1 percent TDS mechanism allows authorities to track transactions, making non-compliance increasingly risky.
Methodology
Sources: Ministry of Finance (Parliament replies), Income Tax Department, ClearTax, Business Today
Time Period: FY 2022-23 to FY 2024-25
Data: Official government TDS collection figures, enforcement statistics shared in Rajya Sabha
Last Updated: December 2025