Is crypto taxed in India?
Yes, crypto profits are taxed at a flat 30%, no matter how long you held them. You’ll also have to pay 4% health and education cess and sometimes a surcharge depending on your income.
What counts as a “crypto transaction”?
Any time you sell, trade, or use crypto to pay for something, it’s considered a taxable event. This includes converting crypto to INR or swapping one crypto for another.
What is a Virtual Digital Asset (VDA)?
VDAs include cryptos like Bitcoin, Ethereum, and NFTs (non-fungible tokens). These are digital things you can own, trade, or sell—but not backed by any central authority.
When did India start taxing crypto?
India started taxing crypto after the Union Budget 2022 under a new law—Section 115BBH of the Income Tax Act.
What is the 1% TDS on crypto?
Every time you transfer or sell crypto, a 1% TDS (Tax Deducted at Source) will be deducted. This applies whether you make a profit or not.
Who deducts the 1% TDS?
If you're using an Indian crypto exchange like CoinDCX, they will deduct the TDS for you and report it to the Income Tax Department.
Can I claim any deductions on crypto profits?
No. You can only deduct the cost of buying the crypto. You can't claim deductions for transaction fees, internet charges, or any other expenses.
Can I adjust my crypto loss against other income?
No. If you lose money on crypto, you cannot adjust it against salary, rental income, or even profit from other cryptos.
Do I have to pay tax if I gift crypto to someone?
Yes. The receiver of the gift must pay 30% tax if the value of crypto received is more than ₹50,000 (unless exempt under gift provisions).
Is holding crypto taxed?
No. Simply holding your crypto isn’t taxable. Tax applies only when you sell, trade, or use it.
How do I report crypto income in ITR?
Crypto transactions must be reported under a special section called "Schedule VDA" in your Income Tax Return from FY 2023-24 onwards.
What is Schedule VDA in ITR?
It’s a new section in the income tax form made specially for Virtual Digital Assets like crypto and NFTs, to report profits, losses, and TDS.
What happens if I don’t pay crypto tax or report it?
You may face:
· Penalty up to 200% of tax evaded
· Jail up to 7 years
· Interest at 1% per month
· Late fees up to ₹5,000
Is crypto taxed differently if I receive it as salary?
Yes. If you receive crypto as salary or payment, it is taxed under your normal income slab, not 30%. But when you sell it later, 30% tax applies again on profits.
What if I’m a miner?
Mining is not directly taxed, but when you receive crypto from mining, it’s treated as business income and taxed under regular income tax rules.
How are airdrops and free tokens taxed?
They are taxed as "other income" when received. Later, if you sell them, 30% tax applies on the profit.
Are NFTs taxed the same as crypto?
Yes. NFTs are included under VDAs and are taxed at the flat 30% rate, just like any crypto asset.
What if I buy crypto using INR?
There’s no tax at the time of buying. Tax applies only when you sell, spend, or trade the crypto.
Are crypto-to-crypto trades taxable?
Yes. Even if you don’t cash out, swapping one crypto for another is a taxable transaction.
Do I have to pay 30% tax even if I made a small profit?
Yes. Whether the gain is ₹500 or ₹5 lakh, 30% tax applies without exception.
Do I need to report wallet transfers?
No tax is applied when you move crypto between your own wallets. But be sure to maintain records.
What happens if I trade on a foreign exchange?
TDS may not be auto-deducted, so you must calculate and pay it manually while filing your taxes.
Are there any changes in crypto tax rules in Budget 2025?
No new tax rates, but the government has introduced mandatory reporting and Schedule VDA, making tracking and compliance more strict.
Can losses in one crypto be adjusted against profit in another?
No. As per law, you can’t adjust or set off losses from one crypto against profits from another. Each crypto is taxed separately.
When is the TDS deducted—during order or execution?
If your order is placed before July 1, 2022, but executed after that date, TDS still applies as per new rules.
What is Section 206AB – 5% TDS rule?
If you haven’t filed your ITR for 2 years and TDS was more than ₹50,000 each year, 5% TDS will apply on your crypto transactions.
What about crypto used to pay for services or goods?
That’s also considered a sale, and the profit on such use is taxed at 30%.
Can I save tax on crypto legally?
As of now, there are no exemptions or special tax-saving provisions for crypto income in India. It’s fully taxed at 30%.
How much tax do I pay on crypto if I earned ₹1 lakh profit?
You’ll pay ₹30,000 + surcharge + 4% cess, totaling approx. ₹31,200.
What if I received crypto worth ₹5,000 as a gift?
If the total value of crypto gifts in a year is under ₹50,000, it is not taxed. If it exceeds ₹50,000, then tax applies.
What are the crypto tax deadlines?
Crypto income is reported for each financial year (April to March). For example, income from April 1, 2024 to March 31, 2025 is reported in July 2025, or by Dec 31, 2025 (belated return).
How can I calculate my crypto taxes easily?
Platforms like CoinDCX and KoinX offer tools that help auto-calculate your crypto tax and even generate TDS reports for filing.
Can I go to jail for not paying crypto tax?
Yes. Non-compliance, especially willful default, can lead to severe penalties and even jail up to 7 years.
What are G20 countries saying about crypto?
G20 leaders, including India, agree that banning crypto isn’t practical, and global regulations should be framed to ensure safety and innovation.
What is the CARF framework?
CARF (Crypto-Asset Reporting Framework) is being implemented to track offshore crypto wallets and reduce tax evasion.
What should investors remember in summary?
· Crypto profits are taxed at 30%
· 1% TDS applies on all transfers
· Gifts, airdrops, DeFi income are taxable
· No loss adjustment or deductions
· Report in Schedule VDA in ITR
· Stay updated with rules and deadlines