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Income Tax · Cryptocurrency

How is cryptocurrency taxed in India — rate, TDS and which ITR?

✍️ Answered by EaseValue Advisors · Updated 17 Jul 2026 · 4-min read
Quick answer

Gains on crypto and other Virtual Digital Assets (VDAs) are taxed at a flat 30% (plus surcharge and cess) under Section 115BBH, whatever the holding period. There's 1% TDS (Section 194S), no deduction except cost, and losses can't be set off. Report in Schedule VDA.

The rate — flat 30%

Income from transfer of a VDA is taxed at a flat 30% (+ surcharge + 4% cess) — Section 115BBH, Income-tax Act 2025 — regardless of whether you held it a day or three years. No slab benefit.

The harsh rules

  • Only the cost of acquisition is deductible — no expenses, no indexation.
  • No set-off of losses — a loss on one coin can't offset gains on another, or any other income, and can't be carried forward.
  • 1% TDS (Section 194S) on the transfer value above the threshold — exchanges usually deduct it.
  • Receiving crypto as a gift is taxable in the receiver's hands (beyond the ₹50,000 non-relative limit).

Which ITR?

Report every trade in Schedule VDA. If you hold as investment, use ITR-2; if you trade as a business, ITR-3. Match the 1% TDS credit from your 26AS/AIS.

Worked example

Buy at ₹2,00,000, sell at ₹3,00,000 → gain ₹1,00,000 taxed at 30% = ₹30,000 (+ cess). A ₹40,000 loss on another coin the same year cannot reduce it.

General information based on the Income-tax Act as it stands, not advice on your specific case. Tax outcomes depend on your exact facts and residential status. © EaseValue Advisors LLP.
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