Crypto Tax Filing in India — VDA Gains, TDS & ITR
Crypto tax filing means reporting every sale, swap or spend of Bitcoin, Ether or any other virtual digital asset (VDA) in your income tax return. Gains are taxed at a flat 30% plus cess, and exchanges deduct 1% TDS. We reconcile your wallets and exchange statements, prepare Schedule VDA and file your return on the Income Tax e-filing portal.
What it is
For crypto tax filing, a virtual digital asset is a cryptocurrency, an NFT or any similar digital token notified under the Income-tax law. When you transfer one, the profit is taxed as a separate bucket of income. It does not matter whether you held for two days or two years.
The flat rate comes from Section 115BBH and the 1% TDS from Section 194S of the Income-tax Act, 1961. Both carry over, under new section numbers, into the Income-tax Act, 2025, which applies from tax year 2026-27. For the return you file now, the 1961 Act still governs. You report the income in Schedule VDA of ITR-2 or ITR-3 on the Income Tax e-filing portal.
Who it applies to
You trade on Indian or foreign exchanges
Every sale counts. So does every swap of one coin for another, and every spend of crypto on goods. Active trading across a year can mean hundreds of taxable events.
You received crypto for free or for work
Airdrops, mining rewards, staking income and crypto paid for freelance work are taxed at your slab rate when received. If you sell them later, the 30% regime applies to the gain.
You hold, or gifted or received, crypto
Gifts from relatives are exempt. A gift above ₹50,000 from a non-relative is taxable at slab rates in the receiver’s hands. Holding alone creates no tax.
Why it matters
Cost is the only deduction
You can deduct only the cost of acquisition. Exchange fees, gas fees and advisory charges are not deductible, so the arithmetic has to be exact.
A loss earns you nothing
A loss on one coin cannot be set off against a gain on another, against other income, or carried forward. Some traders see this first when a tax bill arrives for a year they ended in loss.
Match TDS to your return
The 1% deducted by exchanges shows in Form 26AS and your Annual Information Statement. If your return and those statements disagree, expect a notice.
Documents required
From your exchanges
- Trade history and profit-and-loss report for the year
- TDS certificates or the 194S entries in Form 26AS
- Deposit and withdrawal statements
From your wallets
- Wallet addresses and transaction history
- Records of airdrops, staking and mining receipts
- Proof of cost for coins bought off-exchange or transferred between wallets
Identity and tax records
- PAN and Aadhaar linked to your e-filing account
- Annual Information Statement and Form 26AS
- Bank statements for rupee deposits and withdrawals
How it works
Collect every trade and wallet record
You send exchange reports and wallet histories. We list the exchanges you used, including foreign ones, and check that nothing sits in a wallet nobody remembers.
Reconcile cost, sale value and TDS
We match each sale with its cost of acquisition, mark transfers between your own wallets as non-events, and tally the TDS against Form 26AS and AIS.
Prepare Schedule VDA and the return
For each transfer we enter acquisition date, transfer date, cost and consideration in Schedule VDA, then pick ITR-2 or ITR-3 depending on whether you also have business income.
File, e-verify and keep the workings
We file on the Income Tax e-filing portal, you e-verify, and we hand over a working file you can show if a query comes later. Where a notice arrives, we help prepare the reply.
How crypto income is taxed
| Event | Tax treatment | TDS |
|---|---|---|
| Sell crypto for rupees | Gain over cost taxed at 30% plus 4% cess | 1% under Section 194S |
| Swap one coin for another | A transfer; gain taxed at 30% plus cess | Applies on the consideration |
| Airdrop, mining or staking reward | Taxed at slab rate when received | Not a transfer, so no Section 194S deduction |
| Gift from a relative | Exempt | Nil |
| Gift above ₹50,000 from a non-relative | Taxed at slab rates | Nil |
Take a Faridabad trader who bought Ether in 2023 and swapped part of it into a stablecoin in 2025. That swap is a taxable transfer, though no rupees reached the bank. The gain is taxed at 30%. People miss this one often.
Here is the catch: the 1% TDS is a credit, not the final tax. It is far lower than the 30% you owe, so the balance goes in as self-assessment tax before filing. Tax on the gain stays due whether or not TDS was cut.
Timelines
Return due date
For most individuals without a tax audit, the ITR due date for FY 2025-26 is 31 July 2026 under ITR-1 and ITR-2. If crypto is part of business income, the due date is 31 August 2026 for non-audit cases.
Belated and revised returns
A belated return can be filed up to 31 December 2026, and a revised return up to 31 March 2027. A belated return attracts a Section 234F late fee of ₹1,000 or ₹5,000.
Pay tax before you file
Pay the balance tax on your VDA gains before you file. Advance tax applies if your liability crosses ₹10,000 in the year.
What happens if you do not report crypto
Interest and late fee
Late filing costs ₹1,000 up to ₹5,000 under Section 234F, plus interest on unpaid tax under Sections 234A, 234B and 234C.
A notice from the department
Exchanges deduct TDS against your PAN, and it shows in your statements. A return that leaves out the matching crypto income can end in a notice.
Penalty on under-reported income
Where income is under-reported, the penalty is 50% of the tax on it. Where it is misreported, the penalty is 200%.
Frequently asked questions
How is crypto taxed in India?
Crypto gains are taxed at a flat 30% plus 4% cess under Section 115BBH, whether the holding was short or long. Only the cost of acquisition can be deducted. Losses cannot be set off against other income or carried forward. The 1% TDS under Section 194S is adjusted against your final tax, so the balance is paid with your return. We calculate this transaction by transaction.
Do I owe tax if I only swap one coin for another?
Yes, a swap is treated as a transfer, so the gain is taxable at 30% even if no rupees came into your bank. You work out the gain by comparing the value of what you received with the cost of what you gave up. We map each swap to its cost and keep the workings.
Can I set off a crypto loss against my salary or other gains?
No. Losses from VDAs cannot be set off against any other income, not even gains from another coin, and cannot be carried forward to later years. This is why you should not skip the return in a loss year if you want an accurate record. We still file so your TDS credits are claimed.
What is the TDS on crypto?
The TDS is 1% of the consideration under Section 194S, deducted by the exchange or the buyer when a VDA is transferred. The general threshold is ₹10,000 a year, and ₹50,000 for certain individuals and HUFs. The deduction is not your final tax, because the rate on gains is 30%. We reconcile it with Form 26AS.
Which ITR form do I file for crypto income?
You use ITR-2 if you have no business income, or ITR-3 if you do, and you fill Schedule VDA in either one. ITR-1 cannot be used. The schedule asks for dates, cost and consideration for each transfer. We prepare it from your exchange and wallet records.
Are airdrops, staking and mining income taxable?
Yes, airdrops and rewards are taxed at your slab rate when you receive them, valued at the fair market value on that day. If you later sell the coins, the gain over that value is taxed at 30%. Keep a dated record of each receipt and we will value it for the return.
What if I traded on a foreign exchange with no TDS certificate?
The tax is still due, because the 30% rule does not depend on TDS. Download the full trade history and keep it. We convert foreign-currency values into rupees and report the income in Schedule VDA. A missing certificate does not stop you filing.
I did not report crypto in earlier years. Can it be fixed?
Often yes. If the department has not yet issued a notice, an updated return under Section 139(8A) can still be filed within the permitted period, with additional tax. We first rebuild your past trades and work out the exact tax.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
The government charges no fee for filing a return. If you file after the due date, a Section 234F late fee of ₹1,000 or ₹5,000 applies, depending on your income.
Ready to begin?
Send us your exchange reports and wallet addresses. We will handle your crypto tax filing and tell you what you owe before the due date.