Crypto · 7 min read
Crypto & VDA Taxation in India 2026: 30% Tax, 1% TDS & Schedule VDA
By the India Law Simplified editorial team · Verified against primary government sources (bare Acts & official portals) · Last updated 2026-04-17
Crypto and other Virtual Digital Assets (VDAs) are taxed in India under a special, strict regime. Gains are taxed at a flat 30%, a 1% TDS applies on transfers, and losses cannot be set off against anything. Here is how it works.
1Flat 30% tax under Section 115BBH
Income from transfer of any VDA — cryptocurrency, NFTs, tokens — is taxed at a flat 30% (plus applicable surcharge and cess) under Section 115BBH, regardless of holding period or your slab. The only deduction allowed is the cost of acquisition; no expenses, no indexation.
Crucially, a loss from one VDA cannot be set off against gains from another VDA, nor against any other income, and cannot be carried forward. Verify the current position, as the rules may evolve.
21% TDS under Section 194S
A 1% TDS applies under Section 194S on the transfer of a VDA above the notified threshold in a year. On Indian exchanges, the exchange typically deducts and deposits it; the credit appears in your Form 26AS / AIS, which you claim when filing your return.
Reconcile the TDS shown in 26AS/AIS with your own records before filing — mismatches are a common trigger for notices.
3Schedule VDA and advance tax
Report each VDA transaction in Schedule VDA of the return (available in ITR-2 / ITR-3, depending on your situation — VDA income generally cannot be filed in ITR-1). Keep exchange statements, wallet transaction IDs and cost records for several years.
If your total tax (including VDA) is 10,000 or more, pay advance tax in instalments; shortfalls attract interest under Sections 234B/234C.
Frequently asked questions
Can I set off a crypto loss against my salary or other gains?
No. VDA losses cannot be set off against any income, including other crypto gains, and cannot be carried forward. This is one of the harshest features of Section 115BBH.
Is gifting crypto taxable?
Receiving a VDA as a gift can be taxable in the recipient's hands under the gift provisions (subject to exemptions like gifts from relatives). Disclose VDA dealings in Schedule VDA and confirm treatment with a CA.
Is this tax advice?
No. Crypto tax rules are evolving and fact-specific. Confirm with a Chartered Accountant before trading or filing.
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India Law Simplified is an AI-assisted research & drafting tool, not a substitute for a licensed advocate or CA. Verify all figures and steps with a professional before acting. Statutory limits and fees change with each Finance Act / notification.