Crypto tax in India: 30% tax and 1% TDS explained
India taxes crypto as a "virtual digital asset" (VDA) with its own strict rules. Here is what they mean in plain language, with a worked example. This is general information, not tax advice.
By the CryptoSignals team, Web3India Technology · Published 30 September 2026
The rules in short
- 30% flat tax on gains, plus 4% health and education cess on that tax (surcharge may apply at high incomes). It is the same whatever your income slab.
- Only the cost of acquiring the coin can be deducted. No deduction for exchange fees, internet, or other expenses.
- Losses do not help. A loss on one coin cannot be set off against a gain on another coin or any other income, and it cannot be carried forward.
- 1% TDS on transfers. 1% of the transfer value is deducted when your total for the financial year crosses ₹50,000 (for "specified persons", which includes most salaried individuals) or ₹10,000 (for others). If you have not given your PAN, the rate is 20%.
- Report it in the VDA schedule of your income-tax return. The TDS shows in your AIS / Form 26AS, and you claim it as credit against your tax.
What changed on 1 April 2026
The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026 (FY 2026-27). As reported, the 30% rate and the 1% TDS continue, but the section numbers changed. TDS on crypto, earlier section 194S, is now in section 393(1) (source). Most exchanges and articles still quote the old numbers: section 115BBH for the 30% tax and 194S for TDS. Returns for FY 2025-26 (filed in 2026) still follow the 1961 Act.
Worked example
In one financial year, a salaried person:
- made a gain of ₹40,000 on coin A,
- made a loss of ₹15,000 on coin B,
- transferred coins worth ₹2,00,000 in total on an Indian exchange.
| Taxable gain (the loss on coin B is ignored) | ₹40,000 |
| Tax at 30% | ₹12,000 |
| Cess at 4% of the tax | ₹480 |
| Total tax | ₹12,480 |
| TDS already deducted (1% of ₹2,00,000) | − ₹2,000 |
| Still to pay | ₹10,480 |
Notice that the ₹15,000 loss did not reduce the tax at all. That is the rule people most often get wrong. Try your own numbers in the crypto tax & TDS estimator. It runs only in your browser.
Common questions
Who deducts the TDS? Indian exchanges usually deduct it for you. On foreign exchanges or peer-to-peer (P2P) deals, you may be responsible for deducting and depositing it yourself.
Are crypto gifts taxed? Crypto received as a gift can be taxable for the person who receives it (for example, gifts above ₹50,000 in a year from people who are not relatives). Ask your CA about your case.
What about staking, mining or airdrops? These have their own treatment and are not covered by our estimator. Confirm them with a chartered accountant.
Official reference: incometaxindia.gov.in. Tax rules change. Please confirm your final numbers with a chartered accountant before filing.