Question 1

Crypto Tax: 30% Flat, No Deductions (Section 194, old 115BBH)

Accepted Answer

India's harshest investment tax rate. 30% on every gain. No deductions allowed except purchase cost. Losses cannot offset salary or any other income. 1% TDS on every sale. Every swap, every NFT mint, every staking reward is a taxable event. Many investors do not know that swapping BTC for ETH creates a tax liability. Every transfer is taxable, not just INR withdrawal: Sell crypto for INR = transfer (taxable). Swap BTC for ETH = two transfers (BTC sold at current price in INR, ETH bought at current price). Using crypto to pay for goods = transfer at FMV. Receive crypto for freelance work = income at FMV on receipt date. Mining reward = income at FMV on mining date. Staking reward = income at FMV on receipt. Gift crypto to non-relative = transfer at FMV for giftor. Each of these creates tax. No deductions except acquisition cost: Purchase price in INR = allowed. Exchange fees at PURCHASE = allowed (part of cost). Transfer fees on SALE = NOT allowed (only acquisition cost). Electricity cost for mining = allowed as cost. Interest on loan to buy crypto = NOT allowed. Depreciation = NOT allowed.

Question 2

Crypto-to-crypto swap: every trade is a taxable event

Accepted Answer

Swapping BTC for ETH is not a neutral event. When you swap one VDA for another, the IT department treats it as: (1) selling the first VDA at current market price in INR, and (2) buying the second VDA. The "sale" of the first VDA creates a taxable event, 30% tax on the gain. Example: You bought 1 BTC at ₹20L. You swap it for ETH when BTC = ₹40L. You haven't received INR, but you have a ₹20L VDA gain. Tax = ₹6L (30%). No TDS from the exchange on this (Sec 393, Income-tax Act 2025 (old Sec 194S) applies to INR withdrawals, not crypto-to-crypto on unregulated exchanges). But you must still report it. On Indian exchanges: Exchange deducts 1% TDS on the INR equivalent of every trade above ₹50K. This appears in your Form 168 (old Form 26AS). If you don't file a return declaring these gains, it will be cross-checked.

Question 3

Crypto gifting: tax on giver, tax on receiver, exemptions

Accepted Answer

For the giver: Gifting crypto is a "transfer" under the IT Act. The giver pays 30% VDA tax on the difference between FMV at the time of gift and their cost of acquisition, even though no money was received. This surprises most crypto holders. For the receiver: If you receive crypto as a gift worth above ₹50,000 from a non-relative, the entire FMV is taxable as "income from other sources" at slab rate under Sec 92(2)(m), Income-tax Act 2025 (old Sec 56(2)(x)). Relatives (as defined in the Act) are exempt, spouse, siblings, parents, children, siblings of spouse. Strategy: Gift crypto only to defined relatives to avoid receiver-side taxation. But giver-side tax still applies. There is no way to gift crypto completely tax-free between non-relatives.

Question 4

Tax on inheritance: is there an estate or inheritance tax in India?

Accepted Answer

There is no estate duty or inheritance tax in India currently. The Estate Duty Act 1953 was repealed in 1985. Inheriting property, investments, or gold from a deceased person is not taxable in the hands of the heir, it is treated as a gift from a relative (exempt under Sec 92, Income-tax Act 2025 (old Sec 56(2)) proviso). However: if the inherited asset is later sold, capital gains tax applies, and the cost of acquisition is the cost to the original owner (for pre-April 2001 assets, use FMV on April 1, 2001). Inherited property that generates rent is taxable in the heir's hands from day of inheritance.

Crypto gains? 30% tax. Report it cleanly.

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Crypto gains? 30% tax. Report it cleanly.