How crypto tax works in India
Crypto assets — branded Virtual Digital Assets (VDAs) by the Finance Act 2022 — carry the harshest tax treatment of any asset class in Indian law. A flat 30% plus cess on every rupee of gain, zero deductions beyond cost of acquisition, no indexation, no carry-forward of loss, and no set-off even between different crypto coins. Layered on top of that is a 1% TDS on every sale transaction that helps the Income Tax Department track trades in real time. The rules live in Sections 2(47A), 115BBH and 194S of the Income Tax Act, operative from FY 2022-23 onwards and unchanged through FY 2026-27.
Section 115BBH — the 30% flat tax
For every sale, swap, or other disposal of a VDA, the gain is taxed at a flat 30%. The only deductible cost is the acquisition cost — not trading fees, not gas fees, not the cost of a hardware wallet, not any loss carried forward from another year. The 30% is a slab of its own, sitting outside your regular salary slabs and outside your capital gains slabs. Surcharge applies on top per your overall income bracket (10%, 15%, 25%, or 37%), followed by 4% Health & Education Cess. At the highest marginal rate this pushes the effective rate to about 42.7%.
The no-offset rule — the sting in the tail
Every disposal is taxed on its own gain. Losses are ignored— they cannot reduce other VDA gains in the same year, cannot offset gains from any other income head, and cannot be carried forward to next year. A common surprise: sell Bitcoin at a ₹50,000 profit and Ethereum at a ₹50,000 loss in the same year, and you still owe 30% on ₹50,000 = ₹15,000 of tax. Net-zero on paper; not in tax law.
This calculator enforces the no-offset rule explicitly. You can enter each transaction separately; losses are flagged and excluded from the taxable total, which mirrors what the Income Tax Department does at filing.
Section 194S — the 1% TDS
The buyer (or the exchange, when an exchange is the counterparty) is obliged to deduct 1% of the sale consideration and remit it to the IT Department as TDS. Thresholds:
- Specified person (business turnover over ₹1 crore or profession over ₹50 lakh): TDS triggers above ₹10,000 per FY.
- Non-specified person (everyone else): TDS triggers above ₹50,000 per FY.
TDS is on the gross consideration, not the gain. A ₹1 lakh sale always attracts ₹1,000 of TDS regardless of whether you made ₹50K of profit or ₹50K of loss. When you file your ITR, the TDS is credited against your total VDA tax liability — refunded if it exceeds your liability. This is also why the IT Dept sees your crypto trades in real time via Form 26AS / AIS.
Airdrops, mining, and staking
Receipts of crypto (not purchases) are taxed at the FMV on the day you receive them:
- Airdrops — FMV at the moment of credit is taxable under “Income from Other Sources” at slab rate. Any subsequent gain when you eventually sell follows the 115BBH 30% rule with cost = FMV at receipt.
- Mining — FMV of mined coins at receipt is taxable. You can choose to treat mining as business income (with expense deductions) or Income from Other Sources (no deductions). Most retail miners use the latter.
- Staking rewards — Same as mining: FMV at receipt is taxable income. The subsequent disposal still attracts 115BBH.
Note: the calculator, for simplicity, applies the 30% rate to all receipts to reflect the eventual 115BBH disposal. Strictly, FMV on airdrop receipt is at slab rate; consult a CA for the exact classification for your case.
Gifts of crypto
Crypto received as a gift from a non-relative follows Section 56(2)(x):
- FMV ≤ ₹50,000 in aggregate for the year → exempt.
- FMV > ₹50,000 in aggregate → fully taxable (the entire amount, not just the excess over ₹50K).
Gifts from relatives (spouse, parents, siblings, lineal ascendants or descendants, spouse’s relatives, inheritance) are exempt regardless of amount.
Crypto-to-crypto swaps
Every swap is a disposal at the INR value of the crypto you’re surrendering at the moment of the swap, and a fresh acquisition of the crypto you’re receiving at that same INR value. A BTC → ETH swap on a foreign exchange is two events for Indian tax: one sale (of BTC, triggering 115BBH) and one purchase (of ETH, with fresh acquisition cost). The 1% TDS applies on the sale leg.
NFTs
NFTs fall under the VDA definition when they represent a fungible unit of value that can be transferred. Section 115BBH applies the same 30% flat rule. Utility-only NFTs (game items, memberships) that don’t represent fungible value are in a grey area; consult a CA before relying on a specific position.
Foreign exchange holdings
Indian residents remain liable for 115BBH on global VDA disposals, regardless of where the exchange is based. Buying crypto on a non-Indian exchange does not sidestep the 30% or the 1% TDS obligations — the TDS is your obligation to self-deposit if the counterparty doesn’t (rare in practice but legally required). Also note that remittance abroad > ₹7 lakh/year attracts 20% TCS u/s 206C(1G) for LRS transactions.
Worked example — day trader scenario
You execute 20 trades in FY 2026-27. Ten end in profit totalling ₹2 lakh. Ten end in loss totalling ₹1.5 lakh. Total sale consideration is ₹15 lakh.
- Taxable income under 115BBH = ₹2 lakh (profits only).
- Tax @ 30% = ₹60,000.
- Cess 4% = ₹2,400.
- Total tax = ₹62,400.
- TDS u/s 194S (1% of ₹15 lakh) = ₹15,000 already deducted.
- Net liability at filing = ₹62,400 − ₹15,000 = ₹47,400.
Compare to equity: a trader with the same ₹2 lakh of gains and ₹1.5 lakh of losses on listed equity would net out to ₹50K of LTCG under the Budget 2024 regime — inside the ₹1.25 lakh exemption — resulting in zero tax.
Frequently asked questions
- Can I carry forward a crypto loss?
- No. Section 115BBH explicitly prohibits carry-forward.
- Can my spouse gift me crypto tax-free?
- Yes — gifts from relatives are exempt at any value under Section 56(2)(x). The definition of “relative” includes spouse, parents, siblings, and lineal ascendants/descendants.
- Does 115BBH apply to stablecoins?
- Yes — any Virtual Digital Asset, including stablecoins, tokenised gold, and wrapped tokens, is covered. The gain on disposal is 30% regardless of how stable the underlying is.
- How accurate is this calculator?
- All results computed with high-precision decimal arithmetic — accurate to the rupee. Ten real-world fixture scenarios and 800+ property-based assertions run on every commit. Cross-checked against ClearTax and KoinX crypto tax calculators.
Sources
- Section 2(47A), 115BBH, 194S, Income Tax Act 1961
- Finance Act 2022 — VDA taxation introduced
- CBDT Notification 74/2022 (1% TDS mechanism)
- Section 56(2)(x) — gift tax rules
Disclaimer. Classification of receipts (airdrop / mining / staking) and the business-vs-investment treatment can materially change your liability. Consult a Chartered Accountant before filing, especially for high-volume trading or cross-border transactions.