Tax Guide

Cryptocurrency tax in India: 30% flat, no offset, no mercy.

"I made some money in crypto this year. How is it taxed?"

Section 115BBH of the Finance Act, 2022 was enacted for Virtual Digital Assets (VDAs) which Include Bitcoin, Ethereum, NFTs, and Cryptocurrencies in general.

The tax regime is entirely Different from all other asset classes without any flexibility whatsoever.

Tax shall be imposed @30% on profits from each transaction. There are no exemptions except the cost of acquisition. It means that one cannot set off a loss made in Bitcoin trading against gains made through trading in Ethereum (any other asset class). Carry-forward of losses from trading in Virtual Digital Assets is not allowed. The TDS rate is 1% on all transactions over ₹10,000 (₹50,000 in case of specified persons).

If one received the cryptocurrency as a gift, the fair market value on the date of receipt will be taxed as income at 30%. If the cryptocurrency was mined, then mining income will be taxed @30%.

What the law says — exact provisions

Section 115BBH

VDA income taxed at 30% flat (plus 4% cess = 31.2%). No deduction except cost of acquisition. No loss offset.

Section 194S

TDS @ 1% on transfer of VDA above ₹10,000 per transaction (₹50,000 for specified persons).

Schedule VDA

Mandatory schedule in ITR for declaring all VDA transactions — purchase, sale, gift, mining, staking.

Section 56(2)(x)

Crypto received as gift — market value on receipt date is taxable as "income from other sources" at 30%.

CA Rishabh's verdict

Bottom line

Every crypto transaction is taxable in India at 30%. No loss offset. Keep transaction records from every exchange. Declare in Schedule VDA. TDS credit available from Form 26AS.