Crypto Tax in India: A Comprehensive Guide

Do you have crypto investments? Crypto transactions are becoming more prevalent, from investors buying and selling crypto at a profit to paying for goods and services using digital assets. 

As a result, the Ministry of Finance in India has adjusted the tax code to collect tax revenue from certain crypto transactions. Regardless of whether you have dozens of coins or just one, it’s important to be aware of crypto tax in India to stay compliant with the government and avoid an unexpected tax bill.

In this comprehensive guide, we’ll explore the details of crypto tax in India, including the types of assets subject to taxation, the exact tax rates, real-world examples, regulatory changes, and smart strategies for traders and investors.

How is Crypto Taxed in India?

Crypto transactions are subject to a few different taxes in India. Before we explore those, it’s essential to understand what is considered a taxable event. There are three primary scenarios that trigger crypto tax in India:

1. Selling crypto for fiat (like INR or USD)  
2. Trading one crypto for another, including stable coins  
3. Using crypto to pay for goods and services

Each of these triggers either income or capital gains tax liabilities, depending on the context.

30% Crypto Tax (Section 115BBH)

Section 115BBH of the Income Tax Act imposes a flat 30% tax on crypto gains, without allowing deductions for any expenses (except the cost of acquisition).

Let’s say you bought crypto for INR50,000 and sold it for INR75,000. You held it for three years and paid INR2,000 in broker fees. Your 30% tax will be levied on the full INR25,000 gain, and the INR2,000 fee will not reduce your tax liability.

Note: The holding period does not impact the tax rate.

Disallowance of Loss Offsetting

You cannot use crypto losses to offset crypto gains—or any other gains. Also, losses cannot be carried forward to future years.  

For example, if you have a crypto gain of INR 100,000 and a crypto loss of INR 10,000, a 30% tax will be assessed on the gain of INR 100,000. The loss is not eligible to lower your crypto gains. 

1% TDS (Section 194S)

Effective 1 July 2022, India began withholding a 1 % tax deducted at source (TDS) on every crypto sale. The tax is calculated on the gross transaction value —not on your profit and applies to:

・Sales for INR  
・Crypto-to-crypto trades

TDS is withheld even on loss-making transactions.

Example

Because the buyer must deduct TDS at the time of the trade, the net amount (INR 74,250 in this example) is what lands in your account. Double-check these figures when preparing your tax return.

Paying the TDS

Form 26QE  
・Remit the deducted tax within **30 days** from the end of the month in which the deduction was made.

Higher TDS Rate (Section 206AB)  
・If you haven’t filed your ITR in the past two years and your total TDS exceeded  INR 50,000 , the rate may rise to 5 % .

4% Health and Education Cess

Most crypto transactions will be subject to a 30% tax and the 1% TDS(Tax Deducted at Source); however, there is a third tax to be aware of. An additional 4% health and education cess is assessed on crypto spot trading transactions. Spot trading involves the immediate buying and selling of a digital asset. 

For example, you might purchase crypto in the morning, wait for the price to go up, then sell in the afternoon. This tax can also apply when receiving crypto as wages. 

For instance, if your 30% tax on crypto profits amounts to INR30,000, an additional INR1,200 (4%) is added, making your final liability INR31,200.

What Types of Assets are Subject to Crypto Tax in India?

Hon’ble Finance Minister, Mrs. Nirmala Sitharaman, first announced changes to virtual assets in the Union Budget 2022, broadly defining digital assets as Virtual Digital Assets (VDAs), making them subject to the same tax treatment.  

Let’s cover a few subsections of crypto transactions and the associated tax impact. 

Crypto Taxes in India on Airdrops

When a new token or NFT is launched, companies will test the waters by airdropping them to investors. Although this is not a direct investment, sales of airdrops are considered a taxable event.

Airdropped tokens are considered income when sold. Selling 100 free tokens received in an airdrop at INR6 each results in INR600 profit, taxed at 30% + 4% cess + 1% TDS.

Crypto Taxes in India on Mining

The taxation of crypto mining can be complex. In addition, a 1% TDS is deducted from the source of purchase.   
Mined crypto is taxed when sold. 

For example:
• Mined at INR10,000, sold at INR15,000  
• INR5,000 taxed at 30%, and 1% TDS on INR15,000  
• Mining may also be considered business income if done professionally.

Crypto mining activities might also be included in your taxable income for the year. Let’s say that you earn INR 1,000,000 from mining activities during the year. You also earn INR 6,000,000 from your primary income source. Your total taxable income for the year will be INR 7,000,000 since your mining activities are considered business income. 

Crypto Taxes in India on DeFi Transactions

Earnings from staking, yield farming, or lending may be considered income and taxed at slab rate when received. Selling such crypto triggers the 30% tax.. Activities, such as farming, crypto lending, and crypto borrowing, can be considered income, even if you haven’t sold the digital assets. 

Let’s say that you are starting a new crypto lending business. You decide to lend INR 150,000 in exchange for a 10% interest rate. The interest income earned during the year is taxable income. While there might not be a 30% tax imposed on the transaction, you will still need to pay taxes on any interest income generated. 

Crypto Taxes in India on Non-Fungible Tokens 

Alterations to the Union Budget were broad and apply to all digital assets, including non-fungible tokens (NFTs). NFTs purchased and sold follow the same rules as crypto, with profits being subject to the 30% tax. Additionally, the 4% cess may also apply. For example, if you bought and sold an NFT for a INR 10,000 profit, you would be taxed on this gain at 30% plus any applicable cess and TDS. 

Crypto Taxes in India on Gifts and Donations

Gifts and donations made from virtual assets, including crypto, are taxed. The recipient of the gift is liable for paying a flat 30% rate. This applies to gifting people or organizations virtual assets in India. Let’s say you received crypto worth INR 20,000. The individual receiving the crypto will be required to report and pay taxes on this amount. Since there is no acquisition cost, the entire amount will be subject to taxation.

Crypto received as a gift is taxed in the hands of the receiver unless:

• It’s from a relative  
• It’s under INR50,000 in a financial year  
See Section 56(2)(x) for exemptions.

Receiving Crypto as Wages

Crypto received as wages is potentially subject to two rounds of taxation.   

If your salary is paid in crypto:  

• It’s taxed under your income tax slab as regular income  
• When sold later, the 30% VDA tax applies  
Once sold, any profits will be subject to a 30% tax, the 1% TDS, and the 4% cess. Even if you sell the crypto for a loss, you will still be required to pay the 1% TDS. 

How to Pay Crypto Tax in India

Crypto tax in India is paid depending on the type of tax.  

• File your 30% crypto tax and 4% cess during your annual ITR  
• File TDS via Form 26QE  
• Reconcile Form 26AS for all TDS details

In most cases, the crypto exchange handling the transaction will deduct and pay TDS on your behalf. However, you may still need to report your portion of TDS paid when filing your Income Tax Return. 

Normally, the ITR filing deadline falls at the end of July. However, for AY 2025–26, the deadline has been extended from 31 July 2025 to 15 September 2025 owing to system development and integration work.

Changing Regulations: Budget 2025 and G20

Since crypto is a relatively new asset class, legislation is constantly being refined. Beginning in fiscal year 2025-2026, there will be mandatory reporting requirements for both individuals and crypto exchanges. For one, this includes reporting applicable information on a dedicated section of the Income Tax Return.

In addition, crypto exchanges will be required to submit reports to tax authorities, including transactions per individual. This helps the government verify that all taxable transactions are being reported on the Income Tax Return. If you plan in purchasing or selling crypto in India, it's important to understand these changing regulations to stay in compliance.

Moreover, discussions among G20 nations about crypto are ongoing. Many nations are starting to adopt the idea of crypto as a form of currency, calling on the need for detailed frameworks that align with global standards. One of the main advantages of crypto is the use of a decentralized network, which will make oversight more challenging. 

Strategies for Simplifying Tax Filings

Although you won’t be able to legally avoid paying crypto taxes in India, there are some strategies you can adopt to simplify tax filings. 

Understanding Reporting Requirements

To comply with Indian regulations, all crypto exchanges are required to deduct and deposit TDS on behalf of their users. While most crypto platforms already have the necessary infrastructure to handle compliance (i.e., Automatic deduction of the 1% TDS at the time of transaction), it’s still important to understand your reporting requirements. For example, if you make a crypto sale outside of a regulated platform (i.e., P2P transactions or when using unregulated overseas exchanges), you need to be sure that the necessary TDS is withheld and submitted. Unlike a 30% tax rate, TDS is required to be remitted throughout the year based on the transaction date. 

TDS Refund

To claim a refund for the TDS deducted by the exchange, you must file your Income Tax Return (ITR) at the end of the financial year. If the total TDS deducted exceeds your actual tax liability, the excess amount may be refunded after processing your ITR, based on the records reflected in Form 26AS.

Stay Informed

India has already confirmed the need to streamline reporting and requirements. The changes to the 2025-2026 reporting are likely only the beginning. As India continues to explore the role of crypto in the economy, regulations will continue to change. Staying informed about the latest regulatory updates will unlock new tax planning opportunities and maximize compliance. 

Use a crypto profit and loss Calculator 

Crypto tax in India can quickly add up, which is why it’s important to forecast your upcoming tax liability. Using a profit and loss calculator will help you understand the different taxes your transaction will be subject to, giving you the ability to set aside money for tax time. Profit and loss calculators tools like cryptact can also help you determine if a transaction is worth pursuing, especially if you are on the cusp of a loss. 

Why Choose cryptact?

• Effortlessly import all your transactions from major exchanges, wallets, DeFi, and NFTs—no manual entry required.
• Instantly calculate your crypto profit and loss, even if you have tens of thousands of trades.
• Stay fully compliant with the latest Indian tax rules—cryptact is built to meet current regulations.
• Visualize your portfolio in real time and make smarter investment decisions.
• Trusted by over 150,000 users and highly rated by tax professionals for accuracy and ease of use.
• Get started for free: upload up to 100,000 transactions at no cost.

Don’t risk errors or missed deadlines. 
Let cryptact handle the complexity so you can focus on your investments—not paperwork.