Crypto tax in India 2026 is governed by Section 115BBH of the Income Tax Act. All gains from cryptocurrency, NFTs, and other Virtual Digital Assets (VDAs) are taxed at a flat 30% rate — plus applicable surcharge and cess. A 1% TDS applies on VDA transactions above set limits. Losses from one VDA cannot offset gains from another or from any other income source. Report using Schedule VDA in ITR-2 or ITR-3 for AY 2026-27.
Crypto Tax in India 2026: The Basics
India taxes cryptocurrency under the Virtual Digital Assets (VDA) framework, introduced in the Union Budget 2022. The rules are still in force for AY 2026-27 (FY 2025-26) with no major changes announced. Here is what every crypto investor must know:
- Tax Rate: 30% flat on all VDA gains — regardless of income bracket
- No Deductions: You cannot deduct expenses (other than cost of acquisition)
- No Loss Set-Off: Crypto losses cannot offset other income or even other crypto gains
- No Loss Carry Forward: VDA losses cannot be carried forward to the next year
- TDS: 1% TDS is deducted at source on transactions above ₹10,000 (or ₹50,000 for specified persons)
- Gifts: Crypto received as a gift above ₹50,000 in value is taxable in the receiver's hands
The 30% tax applies on top of your regular income — it is not part of your slab rate. Even if you are in the zero-tax bracket for salary, you still pay 30% on crypto gains. For comparison, check how freelancer tax rules in India 2026 work for self-employed income.
Which ITR Form Should You Use for Crypto Income?
Your choice of ITR form depends on your income sources:
| Your Situation | ITR Form to Use |
|---|---|
| Salaried + Crypto gains | ITR-2 |
| Business income + Crypto gains | ITR-3 |
| Freelancer/Professional + Crypto | ITR-3 |
| Crypto-only income (no job) | ITR-2 |
Important: Do NOT use ITR-1 (Sahaj) if you have crypto income. ITR-1 does not have a Schedule VDA section. Filing with the wrong form is treated as a defective return.
How to Report Crypto Income in ITR: Step-by-Step (AY 2026-27)
- Login to Income Tax Portal: Go to incometax.gov.in and log in with your PAN and password
- Select the Right Form: Choose ITR-2 or ITR-3 based on your income type
- Go to Schedule VDA: Under "Select Schedules", check the box for Schedule VDA (Virtual Digital Assets)
- Enter Transaction Details: For each VDA sale, enter:
- Date of acquisition
- Date of transfer (sale)
- Consideration received (sale price in INR)
- Cost of acquisition (purchase price in INR)
- Net income (profit) = Sale price minus Purchase price
- Calculate Tax at 30%: The portal automatically calculates 30% tax on your Schedule VDA total
- Check TDS Credit: If TDS was deducted on your crypto transactions, verify it appears in your Form 26AS or AIS (Annual Information Statement)
- Claim TDS Credit: TDS credits reduce your payable tax — claim them in Schedule TDS
- Pay Advance Tax if Needed: If your total tax liability exceeds ₹10,000, advance tax was due in instalments. Pay any balance before filing.
- Submit and Verify: Submit your return and e-verify using Aadhaar OTP, Net Banking, or Digital Signature Certificate
Crypto Tax Calculation: Examples
| Scenario | Details | Tax Payable |
|---|---|---|
| Bought BTC for ₹1 lakh, sold for ₹1.5 lakh | Gain = ₹50,000 | 30% of ₹50,000 | ₹15,000 |
| Bought ETH for ₹2 lakh, sold for ₹1.5 lakh | Loss = ₹50,000 — CANNOT offset | ₹0 (but loss wasted) |
| Bought SOL ₹50K (loss) + Bought BTC ₹1L (gain ₹60K) | SOL loss CANNOT offset BTC gain | ₹18,000 (30% on ₹60K) |
| Received 0.1 BTC as gift (worth ₹60,000) | Gift above ₹50,000 — taxable as other income | As per slab rate |
Penalties for Not Disclosing Crypto Income in ITR
The Income Tax Department has sharply increased scrutiny of crypto transactions. Reports from tax advisors indicate a 40% rise in tax notices to crypto investors who failed to disclose VDA income. Here are the penalties:
- Under-reporting of income: Penalty of 50% of the tax payable on under-reported income
- Misreporting of income: Penalty of 200% of the tax payable
- Prosecution: Willful tax evasion above ₹25 lakh can lead to rigorous imprisonment of up to 7 years
- Interest under Section 234B/C: 1% per month on unpaid advance tax
- TDS default: 1.5% per month on TDS not deposited
All major Indian crypto exchanges (WazirX, CoinDCX, Binance India, ZebPay) now report transaction data to the Income Tax Department through the AIS. To simplify your overall ITR filing, you can also use AI tools for ITR filing in India 2026 that handle Schedule VDA calculations automatically. Assume the IT department already has your transaction data — disclosing proactively is safer than waiting for a notice.
Crypto Tax Tips for India 2026
- Download your exchange CSV: Export all transaction history from each exchange before filing — you'll need acquisition date, price, and sale price for every trade
- Use crypto tax software: Tools like Koinly, CoinTracker, or ClearTax's VDA module automatically calculate gains and generate a Schedule VDA-ready report
- Track airdrop and mining income separately: These are taxed as "income from other sources" at your slab rate, not at 30%
- Keep TDS certificates: If your exchange deducted TDS, download Form 16A from the exchange or check your AIS — this is your credit against 30% tax
- Don't ignore small trades: Even a ₹500 crypto gain must be reported in Schedule VDA. The law has no minimum threshold for disclosure. If you also invest in stocks, see our guide on how to start investing in the share market
Frequently Asked Questions
What is the crypto tax rate in India for 2026?
Crypto gains in India are taxed at a flat 30% rate under Section 115BBH of the Income Tax Act — plus 4% cess and applicable surcharge. This applies regardless of your income tax slab. A 1% TDS also applies on transactions above ₹10,000 per year per exchange.
Which ITR form should I use for crypto income in India?
Use ITR-2 if you are salaried or have no business income. Use ITR-3 if you have business or professional income. Do not use ITR-1 — it does not have Schedule VDA for crypto reporting and will be treated as defective.
Can I set off crypto losses against other income in India?
No. Indian law does not allow crypto losses to offset gains from other VDAs, salary, business income, or any other source. Crypto losses also cannot be carried forward to future years. This is one of the harshest aspects of India's VDA tax rules.
Is TDS deducted on crypto in India?
Yes. A 1% TDS is deducted under Section 194S on VDA transactions. The threshold is ₹10,000 per year per exchange for most taxpayers, and ₹50,000 for specified persons. TDS deducted shows up in your AIS and can be claimed as a credit against your 30% tax liability.
Is crypto received as a gift taxable in India?
Yes. If the value of crypto received as a gift exceeds ₹50,000 in a financial year, it is taxable in the receiver's hands as "income from other sources" — at slab rate, not the flat 30% VDA rate. Gifts from specified relatives (spouse, parents, siblings) are exempt.
What documents do I need to file crypto taxes in India?
You need: (1) Transaction CSV from each exchange showing dates, amounts, and INR values, (2) Form 26AS / AIS from the IT portal showing TDS credits, (3) Proof of cost of acquisition for each VDA purchased, (4) Details of any crypto received as gifts or airdrops. Use crypto tax software like Koinly to organize these automatically.
Last Updated: April 24, 2026 | Source: Income Tax Department India (incometax.gov.in)