Contents
- 1 Crypto Tax Calculator — Section 115BBH (Flat 30% + 1% TDS)
- 1.1 Crypto Tax Rules — Section 115BBH (Effective April 2022)
- 1.2 What Counts as VDA (Virtual Digital Asset)?
- 1.3 Worked Examples
- 1.4 TDS Under Section 194S — The Trap Most Miss
- 1.5 Reporting Crypto in Income Tax Return
- 1.6 RBI vs Government — Legal Status of Crypto
- 1.7 Tax-Saving Strategies (Legal)
- 1.8 Frequently Asked Questions
- 1.9 Related Calculators
Crypto Tax Calculator — Section 115BBH (Flat 30% + 1% TDS)
Calculate tax on Bitcoin, Ethereum, NFTs and other crypto gains. Includes 30% flat tax, 4% cess, and 1% TDS under Section 194S.
Crypto Tax Rules — Section 115BBH (Effective April 2022)
From the Finance Act 2022, the government introduced a dedicated tax regime for Virtual Digital Assets (VDAs) — covering crypto, NFTs, and other digital tokens. The rules are deliberately harsh to discourage speculation and ensure the government earns revenue from this previously untaxed sector.
Key Provisions
| Rule | Details |
|---|---|
| Tax Rate | FLAT 30% (no slab benefit) + 4% Health & Education Cess |
| Effective Rate | 31.2% (incl. cess; surcharge if income very high) |
| Allowed Deductions | ONLY cost of acquisition. No transfer/gas fees, no exchange fees, no infrastructure costs deductible |
| Set-off of Losses | Loss from one crypto CANNOT be set off against gain from another crypto or any other income head |
| Carry Forward | Crypto losses CANNOT be carried forward to subsequent years |
| TDS (Section 194S) | 1% TDS on every transfer above ₹10,000 (₹50,000 for individuals/HUF without business income). Deducted by buyer or exchange. |
| Gift of Crypto | Taxable in recipient’s hands if value exceeds ₹50,000 (Sec 56(2)(x)) |
| Mining Income | Taxable at fair market value at the time of receipt; subsequent sale also taxable as VDA |
What Counts as VDA (Virtual Digital Asset)?
- Cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Cardano (ADA), Dogecoin (DOGE), and 1000s more
- NFTs: All non-fungible tokens — art, collectibles, music NFTs, gaming items, etc.
- Other Tokens: Stablecoins (USDT, USDC, DAI), wrapped tokens, governance tokens
- NOT INCLUDED: Gift cards, loyalty points (excluded by CBDT notification)
Worked Examples
Example 1: Simple Buy-Sell Profit
| Bought 0.1 BTC at ₹20,00,000/BTC | Cost: ₹2,00,000 |
| Sold 0.1 BTC at ₹35,00,000/BTC | Sale: ₹3,50,000 |
| Capital Gain | ₹1,50,000 |
| Tax @ 30% | ₹45,000 |
| 4% Cess | ₹1,800 |
| Total Tax | ₹46,800 |
| Net Profit | ₹1,03,200 |
Example 2: Mixed Portfolio with Loss
| Sold BTC at gain ₹2,00,000 | Tax: ₹62,400 |
| Sold ETH at loss ₹1,50,000 | Loss CANNOT be set off |
| Net wealth impact | +₹50,000 (gain − loss) |
| Tax payable | ₹62,400 (on full ₹2L gain) |
| Effective tax rate | 124.8% of net wealth impact |
This is why crypto investors who don’t understand the rules end up paying more in tax than their actual profit. Plan carefully.
TDS Under Section 194S — The Trap Most Miss
From 1 July 2022, every crypto exchange (WazirX, CoinDCX, Binance India, etc.) deducts 1% TDS on the SALE value of every transfer over the threshold (₹10,000/transaction for businesses; ₹50,000/year for individuals/HUF without business income).
- TDS is on SALE value, not on profit. So selling ₹10L crypto at zero profit still triggers ₹10,000 TDS.
- TDS is adjusted against final tax liability when filing ITR. If your total tax is less than TDS, refund is issued.
- Frequent traders accumulate large TDS — locking up capital till refund
- P2P transactions: BUYER must deduct TDS and deposit with Form 26QE (rare, but legally required)
Reporting Crypto in Income Tax Return
From AY 2023-24, ITR forms include dedicated Schedule VDA. You must report:
- Date of acquisition and date of transfer (sale)
- Cost of acquisition (₹)
- Consideration received (₹)
- Income from transfer (computed automatically)
File ITR-2 if only capital gains/VDA. File ITR-3 if crypto trading is your business. Most Indian retail investors use ITR-2 for crypto.
RBI vs Government — Legal Status of Crypto
- Crypto is NOT legal tender in India (Section 22, RBI Act)
- Trading and holding crypto is NOT illegal
- RBI’s 2018 banking ban was overturned by Supreme Court in March 2020 (IAMAI vs RBI)
- 2022 Budget formalised crypto taxation — implicit acceptance for taxation but not as currency
- Reserve Bank’s CBDC (Digital Rupee, e₹) is launched as official alternative
- SEBI doesn’t regulate crypto exchanges (no investor protection)
- FIU-IND requires crypto exchanges to register (PMLA compliance) — enforced from 2024
Tax-Saving Strategies (Legal)
- HODL strategy: Don’t sell — no transfer, no tax. Holding crypto isn’t taxable; only realisation is.
- Year-end planning: Realise losses just before year-end if you’ve sold profitably earlier in same FY (but remember, losses can’t be set off — only useful if you’re triggering wash sale rules elsewhere)
- Use international exchanges? NO — Indian residents’ worldwide crypto income is taxable. Black Money Act applies. Avoid this trap.
- Gifting to family in lower slab: Recipient of gift > ₹50K pays tax at their slab? NO — after receipt, they’re now the owner; subsequent sale by them attracts 30%. Doesn’t help.
- Mining as business: Mining costs (electricity, hardware) deductible if you classify as business income, but rate is still flat 30% on the asset
Frequently Asked Questions
Are crypto-to-crypto trades taxable in India?
Yes. Trading BTC for ETH is considered “transfer” under Sec 2(47) of IT Act. You must compute gain on the BTC at fair market value at time of trade. This makes high-frequency crypto trading extremely tax-inefficient.
What if I don’t report crypto gains?
Exchanges share user data with Income Tax Department (via Annual Information Statement / AIS). Non-reporting triggers notices and 200%+ penalty under Sec 270A. With AI-driven scrutiny, hiding crypto income is extremely risky.
Are airdrops and free tokens taxable?
Yes — taxable as “income from other sources” at slab rate at time of receipt (fair market value). Subsequent sale is taxed under 115BBH (30%) on the difference between sale price and FMV at receipt.
Is staking income taxable?
Yes. Staking rewards are taxed as “income from other sources” at slab rate when received. Subsequent sale of staked tokens follows 30% VDA tax rules. This double taxation makes staking less attractive in India than abroad.
How is DeFi yield farming taxed?
Each separate token earned is taxed at slab rate as ordinary income at fair value of receipt; subsequent sale at 30%. Liquidity pool deposits/withdrawals are also “transfers” triggering 30% tax. DeFi is extremely tax-complex in India.
What about NFTs — same 30% rate?
Yes, all NFTs (digital art, collectibles, gaming items, music NFTs) are VDAs and taxed at 30% flat. NFT creators’ royalty income is also typically treated as VDA income.
Can I claim losses if a crypto exchange (like FTX) collapses?
Theoretically yes — write-off as capital loss. But you cannot set off against other crypto gains (per Sec 115BBH). The loss is essentially a dead loss for tax purposes. Recovery from bankruptcy proceedings if any is taxed separately.
What is the deadline for crypto TDS payments?
The exchange (deductor) deposits TDS within 30 days from end of month in which it was deducted (Form 26QE). For P2P where buyer is deductor, same 30-day rule applies. TDS certificate is auto-populated in your AIS.
Do I have to pay GST on crypto?
Currently, GST on crypto exchange services is 18% on the exchange fee (not on the crypto value). No GST on the crypto asset itself. GST Council has discussed extending to gross value but as of May 2026, only exchange fees attract GST.
What if I bought crypto before April 1, 2022 (pre-115BBH)?
Sales on/after April 1, 2022 are taxed under 115BBH regardless of when you bought. The cost of acquisition is the original buy price (or grandfathering rules don’t apply to crypto, unlike listed equity). So old holdings are now under the strict new regime.
Are foreign crypto exchanges (Binance, Coinbase) reportable?
Yes. Residents must declare foreign crypto holdings in Schedule FA of ITR. Failure attracts ₹10 lakh penalty per year under Black Money Act. Use Indian exchanges where possible for simpler compliance.