Cryptocurrency Tax In India 2025-2026: Rules, Rates, And Details

Like other parts of the globe, digital currencies like Bitcoin, Ethereum, Solana, and others are gaining prominence and are popular investments in India. But, amid the popularity grows the responsibility of comprehending Cryptocurrency Tax in India 2025-2026.  

Beginning in April of the previous year, India has been instituting virtual digital asset (VDA) tax legislation and compliance. By 2025-2026, this legislation has been systematised and is more elaborately structured, along with its regulatory and compliance framework under the direct supervision of the Income Tax Division and the FIU-IND.  

For crypto investors, this is the most up-to-date guide on crypto tax India, including Bitcoin Tax India 2025-2026, TDS obligations, reporting, VDA, and penalties, if applicable, for those who buy, sell, hold or trade crypto.  

What Is A Virtual Digital Asset (VDA)?

Before understanding VDA crypto tax rules India, you need to know what a VDA is. According to the Income Tax Act (section 2(47A)), a Virtual Digital Asset includes:  

• digital currencies, e.g. Bitcoin, Ethereum, Solana  
• non-fungible tokens (NFTs)  
• other such assets or digital tokens stored in a blockchain  
• Centralised or decentralised virtual assets  

The tax implications and compliance are simply structured given the definition above and hence most if not all, crypto-based assets are caught by the definition of virtual digital asset tax.

 

 

Cryptocurrency tax in India 2025-2026 Summary Table

 

Activity	Tax Rates	Notes
Profit from selling crypto	30% flat tax	No slab benefit
TDS on transfer	1% TDS under Section 194S	Buyer deducts TDS
Gifting crypto	Taxable	As per regular income rules
Loss adjustment	NOT allowed	Loss cannot offset any income
Mining or staking rewards	Taxable as Income	At slab rates

 

This is the 2025-2026 structure of crypto tax applicable for all residents and businesses in India.

30% Tax on Profits From Crypto.

The Government has mentioned that gains from the transfer of VDA is taxed at  30%, the same is for lottery and gambling income.

This affects the:

• Selling of crypto at a profit.

• Crypto-to-crypto swaps.

• Spending of crypto on goods/services.

• Conversion of crypto to INR or stablecoins.

For example:

• You paid ₹1,00,000 for your Bitcoin investment.

•  It was sold for ₹1,50,000.

•  Profit: ₹50,000 advance.

•  At ₹50,000, your tax is 30%, or ₹15,000.

This regulation forms most of the core of the cryptocurrency tax India 2025-2026.

No Deductions, No Exemptions, No Loss Carry Forward.

Under VDA taxation rules:

• You can't deduct costs related to mining.

• You can't deduct expenses like exchange fees.

• You can't net off losses from one crypto against the profits from another.

• You can't carry losses forward.

This is one of the main reasons a lot of investors see the bitcoin tax India 2025-2026 as being harsh, but it is the law.

1% TDS Rule – Section 194S 

Every crypto buyer must deduct 1% TDS on the transaction. This applies to: Buying crypto on Indian exchanges, P2P buying, or on a decentralised exchange (if KYC linked).

Example: Buy crypto worth 10000, the exchange deducts 100 Rs as TDS.

This helps the government keep track of all VDA activities which helps improve crypto tax rules India.

Crypto Received as Gift Is Taxable

If someone gifts you crypto, you must pay tax. This is taxed under “Income from Other Sources” for gifts valued exceeding 50000 Rs. There is still a tax applicable when you sell the gift. Under rules governing the gift of digital currency, gifts are fully substantiated.

Tax on Mining & Staking Income Tax on Mining, Staking, airdrops, and rewards is as the income tax is. Tax is as per your slab for income and for the income you earn tax will be 30% on the profit. Income slab 30% on profits.

Taxation for Crypto Trading on Foreign Exchanges

If you trade on Binance, Kraken, Coinbase, KuCoin, etc.

• You must still pay 30% crypto tax in India.
• You must pay 1% TDS manually.
• You must disclose foreign holdings in the ITR Schedule FA.

As of 2025-2026, the government has tightened rules for offshore exchanges with an emphasis on full transparency.

Reporting Crypto in Income Tax Returns (ITR)

As of 2025-2026, the government has introduced:  

Mandatory VDA Reporting Sections in ITR

You will be required to disclose the:  

• Cost of acquisition  
• Sale value  
• Date of purchase  
• Date of sale  
• Exchange Name  
• Wallet Address. 

This makes cryptocurrency tax in India 2025-2026 much more systematic than it has ever been.  

GST on Crypto Transactions (2025-2026 Update)

Transactions in crypto may trigger GST:  

Activity	GST Rate
Exchange trading fee	18%
Crypto brokerage	18%
Crypto mining (if business)	18%

 

As of 2025-2026, there has been ongoing talks to classify crypto like online gaming for GST purposes. This might be high risk for changes, but other than this regular GST rules apply.

Consequences of Not Paying Crypto Tax

If you disregard this:  

• Penalty like the tax amount.
• Interest under Section 234A & 234B.
• Potential review from the VDA Compliance Unit.
• Blocked exchange accounts (in severe instances).  

As of now, cryptocurrencies are completely tax monitored in India.  

 

 

How to Compute Crypto Tax in 2025-2026?

The tax computation formula will be in this format:  

Tax = 30% × (Sale Price − Purchase Cost) + 4% Cess

To illustrate, 

Ethereum is bought at 50,000, sold at 70,000, profit will be 20,000, tax will be 6,000, Cess will be 240.  

Overall Tax = 6,240

This is consistent for every transaction.  

Sample for Bitcoin Tax India 2025-2026

Let’s assume you bought 0.02 BTC at 60 lakh per BTC.  

Cost = 1,20,000  

Then you sell at 70 lakh per BTC.  

Sale Value = 1,40,000  

Profit is 20,000.  

Tax is 30% of 20,000 = 6,000.  

Cess is 240.  

Overall Tax = 6,240

That’s the exact way to compute Bitcoin tax India 2025-2026.

Is there a chance that Crypto Tax in India will be lowered in 2026?

This is a subject that is in:

Finance Ministry.

SEBI.

RBI.

Industry bodies have:

• Suggested a 30% lower tax.
• Suggested a lower 1% TDS.
• Suggested a loss set-off.

But so far in 2025 there are no official announcements that are changing the tax structure.

Is there a tax return on VDA that is required?

A VDA tax return is required for those who have:

• Purchased crypto.
• Sold crypto.
• Received crypto as salary.
• Received crypto as a gift.
• Staked or mined tokens.
• Traded NFTs.
• Used foreign exchanges.
• Not only that but if you did not realise a profit, you must disclose the holdings.

Tips for VDA Tax Compliance

• Keep records of each trade.
• Obtain annual statements from exchanges.
• Note every wallet transfer.
• Determine tax each month.
• File tax return on time.
• Clearly declare foreign assets.
• This is how you can stay compliant with crypto tax rules India.

 

 

Final Thoughts on VDA Tax in India 2025-2026

India is one of the countries with the most stringent crypto taxes for VDAs. With a 30% profit tax, 1% TDS plus strict reporting and GST, the country will have full visibility and traceability of VDA transactions.

These regulations are put in place in order for the investors to have an easier time in the world of cryptocurrencies while also maintaining compliance and avoiding penalties. Completing these regulations is necessary in order to understand the nuances of the complexities of cryptocurrencies in India. 

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DISCLAIMER: This blog is NOT any buy or sell recommendation. No investment or trading advice is given. The content is purely for educational and information purposes only. Always consult your eligible financial advisor for investment-related decisions.