- India taxes income from transferring a virtual digital asset (VDA), such as a crypto-asset or an NFT, at a flat 30%, plus surcharge and a 4% health and education cess. This applies to financial year 2025-26 under the Income-tax Act, 1961 and from tax year 2026-27 under the new Income-tax Act, 2025.
- Only the cost of acquisition is deductible. Fees and other expenses are not, and a loss on one VDA cannot be set off against any other income or carried forward.
- The buyer or exchange deducts 1% tax at source (TDS) from the sale price. In 2026-27 there is no TDS if the year’s total stays at or below ₹50,000 (some individuals and HUFs) or ₹10,000 (everyone else).
- We found no tax department guidance on mining, staking, DeFi or airdrops. The 30% regime covers the transfer of a VDA, whatever its source.
- Whether India taxes you depends on your residential status, which follows from the days you spend in India each year (182 days, or 60 days plus 365 days in the four years before).
- No crypto law or new crypto tax has been enacted. In July 2025 the government told Parliament that no change to the 30% tax or the 1% TDS was under consideration.
This page covers income tax for individuals who buy, sell or swap crypto in India. How to report it and the deadlines are on filing and deadlines; companies are on business tax. It is general information, not tax advice.
How the VDA tax works
Indian tax law uses the term virtual digital asset (VDA). Since 1 April 2026 the definition in the Income-tax Act, 1961 explicitly includes “any crypto-asset being a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology”, next to tokens generated through cryptographic means and non-fungible tokens (NFTs). Indian rupees and foreign currency are not VDAs.
Two laws apply, depending on the year:
- Financial year 2025-26 (1 April 2025 to 31 March 2026), the “assessment year 2026-27”, still falls under the Income-tax Act, 1961. Section 115BBH sets the 30% rate and section 194S the 1% TDS.
- Tax year 2026-27 (from 1 April 2026) and later fall under the Income-tax Act, 2025, which came into force on 1 April 2026 and uses “tax year” instead of “previous year” and “assessment year”. The 30% rule is now section 194(1), Table serial number 4, and the TDS is section 393(1), Table serial number 8(vi).
The rule itself did not change. The 2025 Act taxes “any income from the transfer of any virtual digital asset” at 30% for any person, with these conditions: no deduction of any expenditure (other than cost of acquisition, if any) or allowance, no set-off of any loss against that income, and no set-off of a loss from a VDA against other income or carry-forward to later years.
| Item | 2025-26 (1961 Act) | Tax year 2026-27 (2025 Act) |
|---|---|---|
| Tax on income from transferring a VDA | 30% (section 115BBH) | 30% (section 194(1), Table serial number 4) |
| Deductions | Cost of acquisition only | Cost of acquisition only |
| Losses | No set-off, no carry-forward | No set-off, no carry-forward |
| Surcharge for individuals (on the tax) | 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore; 37% above ₹5 crore in the old regime only | The same |
| Health and education cess | 4% of tax plus surcharge | 4% of tax plus surcharge |
| TDS on the sale price | 1% (section 194S) | 1% (section 393(1), Table serial number 8(vi)) |
The surcharge depends on your total income. The cap of 15% that applies to dividends and certain capital gains does not cover VDA income. In the default (new) regime the surcharge stops at 25%. The highest combined rate on VDA income is therefore 30% × 1.25 × 1.04 = 39% in the new regime and 30% × 1.37 × 1.04 = about 42.7% in the old regime.
TDS of 1% when you sell
Whoever pays a resident for a VDA must deduct 1% of the amount as tax at the time of payment or credit, whichever is earlier. On an Indian exchange the exchange does this. If you are paid in another VDA or in kind, the payer must make sure the tax has been paid before releasing the consideration. The TDS is not an extra tax: it is credited against the tax in your return.
No TDS is due if the total paid during the year does not exceed:
- ₹50,000 when the payer is an individual or Hindu undivided family (HUF) without business or professional income, or with business turnover up to ₹1 crore (professional receipts up to ₹50 lakh) in the year before;
- ₹10,000 for any other payer.
These thresholds are in the 2025 Act for tax year 2026-27 and were the same in section 194S of the 1961 Act. Because the rule applies to “any person”, a private buyer who pays you directly (peer to peer) can also have to deduct TDS.
A worked example
Our own example, following the rules above, for financial year 2025-26: a resident individual sells bitcoin on an Indian exchange for ₹10,00,000. The bitcoin cost ₹6,00,000, and the exchange charged ₹5,000 in fees. Separately, the person sold another token at a loss of ₹1,00,000. Total income stays below ₹50 lakh, so there is no surcharge, and we assume the person’s other income already uses the basic exemption.
| Step | Calculation | Result |
|---|---|---|
| Income from the bitcoin | ₹10,00,000 − ₹6,00,000 cost (the ₹5,000 fee is not deductible) | ₹4,00,000 |
| Loss on the other token | Cannot be set off against the bitcoin gain or other income, or carried forward | ₹0 effect |
| Tax at 30% | ₹4,00,000 × 30% | ₹1,20,000 |
| Cess at 4% | ₹1,20,000 × 4% | ₹4,800 |
| Total tax | ₹1,20,000 + ₹4,800 | ₹1,24,800 |
| Already deducted as TDS | ₹10,00,000 × 1% | ₹10,000 |
| Still to pay | ₹1,24,800 − ₹10,000 | ₹1,14,800 |
This is an illustration, not a tax calculation for your situation. Interest for late payment of advance tax, other income and the surcharge can change the result.
Losses and costs
The VDA rules are stricter than those for shares or property:
- Each loss stays where it is. A loss on one VDA cannot reduce the gain on another VDA, your salary, business income or capital gains, and it cannot be carried forward to a later year.
- Only the cost of acquisition counts. Exchange fees, gas fees, interest and other expenses are not deductible, even if you trade as a business.
- Losses from other sources do not reduce VDA income either. The 2025 Act says no set-off of any loss is allowed in computing VDA income.
Mining, trading and other situations
The 30% rate applies to the transfer of a VDA, whether you are an investor or a frequent trader, and whether the income is reported as capital gains or as business income. In the return, Schedule VDA asks for each transfer whether it is capital gains or business income (see filing). We found no tax department guidance on how mining income is taxed before you sell the coins, or on crypto received as salary.
How gifts and inheritances of VDAs are taxed is not covered here: we could not open the tax department’s guidance on this from our location (October 2026).
Staking, DeFi, airdrops and NFTs
In the sources we could check, the Income Tax Department publishes no guidance on staking, lending, liquidity pools or other DeFi (decentralized finance) activity, or on airdrops (free tokens sent to your wallet). What the law does say:
- NFTs (non-fungible tokens, unique tokens that stand for a digital or physical item) are VDAs, so selling one is taxed at 30% with only the cost deductible.
- Swaps count as transfers. The TDS rules cover consideration paid “in exchange of another virtual digital asset”, so swapping one token for another is a transfer of a VDA.
- Selling later. When you sell or swap coins you received through staking or an airdrop, that transfer falls under the 30% rule like any other VDA. The law does not say what the cost of such coins is, or whether they are taxed when you receive them.
If you earn large amounts from staking or DeFi, ask a chartered accountant how to report them before you file.
Moving to or from India
Your residential status for a year decides how much India taxes. The return form for 2025-26 (ITR-2) lists the tests of section 6 of the 1961 Act. You are resident if:
- you were in India for 182 days or more during the year; or
- you were in India for 60 days or more during the year and 365 days or more in the 4 years before. For Indian citizens and persons of Indian origin who visit India, the 60 days become 182 days, or 120 days if their income other than from foreign sources exceeds ₹15 lakh.
An Indian citizen with income other than from foreign sources above ₹15 lakh who is not liable to tax in any other country because of domicile or residence is also treated as resident. A resident can be “resident but not ordinarily resident” (RNOR), for example after being non-resident in 9 of the 10 previous years, after 729 days or less in India in the 7 previous years, or in the two special cases above (the 120-day visitor and the citizen not taxed elsewhere). The ITR form shows these options as “RES”, “NOR” and “NRI”.
What this means for crypto, as far as the official sources say:
- Coming to India. The sources we checked contain no special rule for crypto bought before you became resident: when you sell as a resident, the 30% applies to the sale price minus your cost of acquisition.
- Leaving India. We found no exit tax or deemed sale for crypto in the sources we checked. The 1% TDS described above applies to payments to residents.
- Foreign assets. The government told the Lok Sabha that the Black Money Act, 2015 applies to undisclosed foreign assets, including VDAs. Residents who hold crypto abroad should check how to disclose it in the return.
The tax department publishes no rule on where a crypto-asset is located, and the tests for tax year 2026-27 are in section 6 of the 2025 Act, which we could not open from our location (October 2026). If you move in or out, get advice in both countries.
Upcoming changes
At the time of writing (October 2026) no crypto law has been enacted and no change to the VDA tax is in force beyond the move to the Income-tax Act, 2025. On 28 July 2025 the Minister of State for Finance told the Lok Sabha that “no such proposals are under consideration” for revising the 30% tax and the 1% TDS. The Lok Sabha Standing Committee on Finance is examining “A Study on Virtual Digital Assets (VDAs) and Way Forward” and scheduled hearings with ZebPay, Binance, WazirX, IFSCA and the Ministry of Finance for 20 May 2026; we found no report from it yet, and no government discussion paper on crypto.
For financial years from 2026-27, crypto exchanges must also report crypto-asset transactions to the tax department (section 509 of the 2025 Act); see filing.
Sources
- Income Tax Department: Income-tax Act, 2025, section 194 (Tax on certain incomes) (last checked October 2026)
- Income Tax Department: Income-tax Act, 2025, section 393 (tax to be deducted at source) (last checked October 2026)
- Income Tax Department: Income-tax Act, 1961, section 194S (Payment on transfer of virtual digital asset) (last checked October 2026)
- Income Tax Department: Income-tax Act, 1961, section 2(47A) (virtual digital asset) (last checked October 2026)
- Ministry of Finance: Memorandum explaining the provisions in the Finance Bill, 2026 (rates, surcharge and cess for 2026-27) (last checked October 2026)
- Income Tax Department e-filing portal: ITR-2 schema for AY 2026-27 (residential status options) (last checked October 2026)
- Lok Sabha: Unstarred question 1340, Regulations for Virtual Digital Assets (28 July 2025) (last checked October 2026)
- Lok Sabha: Unstarred question 309, Investments made through Crypto Currencies (2 February 2026) (last checked October 2026)
- Lok Sabha Secretariat: Standing Committee on Finance, notice of sittings on 20 May 2026 (last checked October 2026)
The Income Tax Department’s website (incometaxindia.gov.in) blocked access from our location in October 2026; we read the section pages listed above in their most recent archived versions (2026). This page is general information, not tax advice. Rules and rates change, so check the official sources above or ask a chartered accountant before you act.