Cryptocurrencies like Bitcoin, Ethereum, and Solana are no longer fringe assets in India. With growing adoption comes the need to clearly understand cryptocurrency tax in India 2025–2026. The government now treats crypto as Virtual Digital Assets (VDA) and has built a strict framework around tax, TDS, and reporting. This short guide explains the rules in a clear, beginner-friendly way.
What Is VDA Under Indian Crypto Tax Laws?
Under the Income Tax Act, crypto assets fall under the term Virtual Digital Asset (VDA). This includes:
- Cryptocurrencies like Bitcoin and Ethereum
- NFTs and blockchain-based tokens
- Any digital asset stored or transferred using blockchain
In simple words, almost every crypto investment today comes under VDA crypto tax rules in India.
How Is Cryptocurrency Taxed in India in 2025–2026?
Flat 30% Tax on Crypto Profits
Any profit from selling, swapping, or spending crypto is taxed at a flat 30%, regardless of your income slab. This applies to:
- Selling crypto for INR
- Crypto-to-crypto trades
- Using crypto for goods or services
This rule forms the backbone of crypto tax India.
No Loss Set-Off or Deductions
One of the strictest parts of Bitcoin tax in India 2025–2026 is:
- Crypto losses cannot be adjusted against gains
- No deduction for fees, mining costs, or expenses
- Losses cannot be carried forward
Only the purchase cost is allowed while calculating profit.
1% TDS on Crypto Transactions Explained
What Is Section 194S?
Every transfer of crypto attracts 1% TDS under Section 194S. Usually:
- The buyer or exchange deducts it
- Applies to trades on Indian and even foreign platforms
This helps the government track all VDA transactions and enforce crypto tax rules in India.
Tax on Gifts, Mining, and Staking Income
Crypto Gifts Are Taxable
If you receive crypto as a gift worth more than ₹50,000, it is taxed as Income from Other Sources. Later, when you sell it, capital gains tax also applies.
Mining and Staking Rewards
Income from mining, staking, airdrops, or rewards is taxed as regular income based on your slab. When you later sell those tokens, the 30% VDA tax applies again on profits.
Crypto Tax on Foreign Exchanges
If you trade on platforms like Binance, Kraken, or Coinbase:
- 30% crypto tax in India still applies
- You may need to manage TDS yourself
- Foreign holdings must be disclosed in ITR
The focus in 2025–2026 is full transparency for offshore crypto activity.
Reporting Crypto in Income Tax Return
Mandatory VDA Disclosure
While filing ITR, you must report:
- Purchase and sale values
- Dates of transactions
- Exchange or wallet details
Even if you made no profit, holding crypto must be disclosed. This makes cryptocurrency tax in India 2025–2026 more systematic than ever.
GST Impact on Crypto Transactions
While crypto itself isn’t taxed under GST, services like:
- Exchange trading fees
- Brokerage charges
- Mining as a business activity
may attract 18% GST. Regulatory clarity is still evolving, so investors should stay updated.
What Happens If You Don’t Pay Crypto Tax?
Ignoring crypto tax India rules can lead to:
- Heavy penalties and interest
- Scrutiny from tax authorities
- Possible account restrictions on exchanges
With FIU-IND oversight, crypto transactions are now closely monitored.
How to Calculate Crypto Tax in India?
Your tax is simply:
30% of profit + 4% cess
For example, if your profit is ₹20,000:
- Tax = ₹6,000
- Cess = ₹240
- Total = ₹6,240
This same method applies for Bitcoin tax in India 2025–2026 and other tokens.
Will Crypto Tax Be Reduced in 2026?
Industry bodies have requested:
- Lower tax rate
- Reduced TDS
- Permission for loss set-off
But as of now, there is no official change announced. Investors should assume current rules will continue.
Smart Tips for VDA Tax Compliance
To stay safe under crypto tax rules India:
- Keep records of every trade
- Download exchange statements
- Track wallet transfers
- Calculate tax regularly
- File ITR on time and disclose assets
Good documentation is your best defence.
Final Thoughts on Cryptocurrency Tax in India 2025–2026
India has one of the strictest crypto tax regimes in the world. With a 30% profit tax, 1% TDS, and detailed reporting, every crypto investor must be careful and compliant. While the rules may feel tough, understanding them clearly helps you invest responsibly and avoid future trouble.
If you’re serious about crypto in 2025–2026, mastering cryptocurrency tax in India is just as important as choosing the right coin.
