Crypto tax in India
This is general information, not legal, tax, or financial advice. Verify the current rules with a qualified local professional and the official regulator before acting.
India taxes income from the transfer of a virtual digital asset at a flat 30 percent under Section 115BBH of the Income Tax Act, plus a 4 percent cess and any applicable surcharge, as of June 2026. The only deduction allowed is the cost of acquisition, and losses cannot be set off against other income or carried forward. A separate 1 percent tax deducted at source applies under Section 194S. The Income Tax Department and the Central Board of Direct Taxes administer these rules.
The rules in detail
Crypto assets are defined as virtual digital assets (VDAs) under the Income Tax Act, which gives holding, buying, and selling them a clear legal basis even though there is no dedicated crypto law and crypto is not legal tender in India. The VDA definition covers coins such as bitcoin and ether, stablecoins, and non fungible tokens. The tax treatment is the same across these categories, and it is administered by the Income Tax Department under the Central Board of Direct Taxes (CBDT). The position below is current to June 2026.
The flat 30 percent tax
Under Section 115BBH, income from the transfer of a virtual digital asset is taxed at a flat 30 percent, in force since the 2022 to 2023 financial year. There is no distinction between a holding kept for a week and one kept for years, so the same rate applies regardless of how long you held the asset. A 4 percent health and education cess is added, which brings the minimum effective rate to about 31.2 percent, and a surcharge can raise it further for high income taxpayers. The only deduction permitted is the cost of acquisition. Exchange fees, network or gas fees, and other costs are not deductible against the gain as of June 2026.
The 1 percent tax deducted at source
Section 194S applies a 1 percent tax deducted at source (TDS) on the transfer of a virtual digital asset above the annual threshold, in force since July 2022. The threshold is 50,000 rupees in a financial year for specified persons and 10,000 rupees otherwise. On a registered Indian exchange the platform usually deducts and deposits this 1 percent automatically. On a peer to peer trade or a foreign platform the buyer may be the one responsible for deducting and reporting it, which is a common compliance gap. The TDS is not an extra tax but is credited against your final liability when you file. This position is current to June 2026.
No loss set off and no carry forward
A loss on one virtual digital asset cannot be set off against a gain on another in the same year, and a crypto loss cannot be set off against salary, business income, gains from shares, or any other income. Such losses also cannot be carried forward to a later year. This makes each profitable transaction taxable on its own, with no relief from losing trades, under Section 115BBH as of June 2026.
Reporting and a note on change
Virtual digital asset income is reported through Schedule VDA in the income tax return. Many taxpayers use the ITR 2 form where the activity is treated as capital gains, or the ITR 3 form where it is treated as business income. The correct treatment depends on your facts. Goods and services tax can also apply to the fees a platform charges, separate from the income tax on your gains.
A new reporting obligation under Section 285BAA requires reporting entities, including exchanges, to file crypto transaction information in a standardised statement, with the requirement taking effect from April 2026. A broader regulatory framework has been under discussion across the Ministry of Finance, the Reserve Bank of India, and the Securities and Exchange Board of India, but no dedicated crypto law has been passed as of June 2026, so treat any wider change as something to monitor. This is general information, not tax advice. Verify your treatment with a qualified chartered accountant before filing.
How to act legally in India
Buying and selling on an exchange registered with the Financial Intelligence Unit India makes record keeping and tax reporting much simpler, because registered platforms typically deduct the 1 percent TDS and supply transaction statements. Several registered platforms serve India residents as of June 2026.
Compare exchanges available to India users
Platforms registered with the Financial Intelligence Unit India and serving India residents include CoinDCX, CoinSwitch, ZebPay, Mudrex, and Binance. See the registered options side by side, then verify the current position with the platform and the regulator before you sign up.
Compare available exchangesRegulator and sources
- Income Tax Department and the Central Board of Direct Taxes (CBDT) Sections 115BBH, 194S, and 285BAA of the Income Tax Act and Schedule VDA reporting, current to June 2026.
- Financial Intelligence Unit India (FIU) registration of virtual digital asset service providers under the Prevention of Money Laundering Act.
Frequently asked questions
How is crypto taxed in India?
Income from transferring a virtual digital asset is taxed at a flat 30 percent under Section 115BBH of the Income Tax Act, plus a 4 percent cess and any surcharge, as of June 2026. The only deduction allowed is the cost of acquisition. This is not tax advice, so verify before filing.
What is the 1 percent TDS on crypto in India?
Section 194S applies a 1 percent tax deducted at source on the transfer of a virtual digital asset above the annual threshold, in force since July 2022. Registered Indian exchanges usually deduct it automatically, current to June 2026.
Can I set off crypto losses in India?
No. As of June 2026, a loss on one virtual digital asset cannot be set off against a gain on another, cannot be set off against any other income, and cannot be carried forward to a later year, under Section 115BBH.
Do I pay tax when I swap one crypto for another in India?
Generally yes. A swap of one virtual digital asset for another is a transfer and a taxable event under Section 115BBH as of June 2026, and 1 percent TDS may also apply. This is not tax advice, so verify before filing.
How do I report crypto in my Indian tax return?
Virtual digital asset income is reported through Schedule VDA in the income tax return, using the ITR 2 form where treated as capital gains or the ITR 3 form where treated as business income, as of June 2026.
Who administers crypto tax in India?
The Income Tax Department and the Central Board of Direct Taxes administer the virtual digital asset tax rules under the Income Tax Act, current to June 2026. The Financial Intelligence Unit India registers the exchanges used to buy and sell.
Related pages
Risk and change note: crypto rules change frequently and can shift with little notice. The positions above carry an as of date and were last reviewed on June 21, 2026. Confirm the current rules with the named regulator and a qualified local professional before you act.
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