Tax on Crypto Currencies in India

Preface: This post was originally published in 2024 and has been updated on November 11, 2025, to provide you with the most current and accurate information.

With investors around the world, the cryptocurrencies continue to gain traction. In India, there are millions of crypto investors. These individuals are mainly aged between 18 and 60, according to Forbes. In this article, we will discuss all about crypto tax India.

Is Cryptocurrency taxed in India?

Yes, virtual digital assets, or crypto assets, are subject to crypto currency tax India since 2022. After the announcement of significant changes to the virtual asset class by the Hon. Finance Minister, Mrs. Nirmala Sitharaman, in the Union Budget 2022, virtual digital assets, also known as crypto assets, are subject to taxation in the country. 

The government has formally termed digital assets, including cryptocurrency holdings, as "Virtual Digital Assets". These include all cryptocurrencies, including Ethereum, Bitcoin, Shiba Inu and others, as well as other digital assets like Non-Fungible Tokens (NFTs). 

How much Crypto Tax In India do you have to pay?

When you sell crypto assets for more than Rs. 50,000 (or Rs. 10,000 in certain cases) in a single financial year, you'll have to pay a 1% TDS tax in addition to 30% tax on the gains you've made from trading, selling or spending cryptocurrency. 

If it is determined that you are receiving additional cryptocurrency income, for instance, through mining, airdrops or staking, you may also be required to pay income tax at your individual slab rate upon receipt.

Crypto Tax Slab in India (FY 2024-25 / AY 2025-26)

The crypto tax slab in India is as follows:

Individual Income Tax Slabs (FY 2024-25 / AY 2025-26)

The individual income tax slabs for FY 2024-25 / AY 2025-26 is as follows:

Applicable Rates on Crypto Transactions

The applicable rates on crypto transactions in India is as follows:

Budget 2025 Crypto Tax Update

Under the Union Budget 2025, a new framework had been introduced for mandatory reporting of transactions pertaining to cryptocurrency. Beginning from FY 2025-2026, individuals as well entities that deal in Virtual Digital Assets (VDAs) would be required to report their crypto gains under a newly defined section - Section 158B of the Indian Income Tax Act, referred to as Schedule VDA.

The aim of the new section is to simplify tax reporting for digital assets and enhance overall transparency. Further, it must be noted that crypto exchanges and other participants in such transactions will be obligated to provide detailed reports to tax authorities to ensure greater compliance and minimize the risk of penalties.

Crypto Transactions on which Tax is Payable In India

You are required to pay India crypto tax of 30% if you engage in the following crypto transactions:

• Spending cryptocurrencies to buy any goods/services.

• Exchanging cryptocurrencies for other cryptocurrencies such as Bitcoin for Shiba Inu.

• Trading in cryptocurrency by making use of fiat currency such as INR.

• Receiving cryptocurrency as a payment mode for a service/gift.

• Mining of cryptocurrency.

• Being on a cryptocurrency payroll.

• Staking crypto and acquiring the stake benefits.

• Receiving crypto airdrops.

How to Calculate Tax on Cryptocurrency in India?

Below, we have explained how you can calculate tax on cryptocurrency in India:

Step 1: First, you need to calculate your total gains using this formula: Crypto Gains = Sale Price - Cost Price.

Step 2: As per Section 115BBH, cryptocurrencies are taxed at a flat rate of 30%.
Additionally, a 4% health and education cess is applicable on the tax amount. Therefore, you must apply the 30% tax rate + 4% cess on the crypto gains.

Step 3: Now, you need to calculate the total tax payable. Here is how to do it: Tax Payable = (Crypto Gains x 30%) + 4% cess on the tax

Example

Here is an example on how to calculate tax on crypto. Suppose you buy Bitcoin for Rs. 1,00,000 and sell it for Rs. 1,50,000.

• Crypto Gains = Rs. 1,50,000 - Rs. 1,00,000 = Rs. 50,000

• Crypto Tax Rate of 30% = Rs. 50,000 x 30% = Rs. 15,000

• Health & Education Cess Rate of 4% = Rs. 15,000 x 4% = Rs. 600

• Total Tax Payable = Rs. 15,000 + Rs. 600 = Rs. 15,600

Key Concerns Regarding Cryptocurrency Tax

The complexities of cryptocurrencies and NFTs don't seem to be taken into consideration by the new taxation regime of GOI. Experts in India and elsewhere had expressed concerns about the proper classification of cryptocurrencies and NFTs as capital assets, cash, securities, etc. prior to the amendment of the Income Tax Act. For creating a tax system which is efficient, a detailed analysis of each VDA's type is needed. The Income Tax Act, as of now, handles cryptocurrencies, NFTs, and other VDAs uniformly. 

The usage of DLT and blockchain technology by cryptocurrencies and NFTs is where the similarities between them end. NFTs are not fungible by nature, whereas cryptocurrencies are. The uses for cryptocurrencies are restricted. But when we discuss NFTs, they can be used as artwork, musical instruments, ownership certificates, and more. There may be confusion because the Income Tax Act doesn't cover the features of VDAs or how to obtain and use them.  

Conclusion

It is essential to understand the rules and laws related to cryptocurrency taxation in India. All the taxpayers must adhere to TDS requirements and file tax returns on time. It is essential to stay updated about changes to tax rules. Transparency, legitimacy, and peace of mind are guaranteed when engaging in cryptocurrency transactions in India by following these recommendations. If you need assistance in filing ITR, get in touch with us.

Frequently Asked Questions (FAQs)

Q1. Can my crypto transactions be tracked by the Income Tax Department?

A. Yes, your crypto transactions can be tracked by the Income Tax Department. It utilizes KYC data from domestic exchanges and a 1% TDS to monitor the crypto holdings of individuals to enhance tax compliance efforts.  

Q2. What are the consequences if I fail to pay the crypto tax?

A. Ignoring cryptocurrency taxes will come with consequences that go beyond fines and might land individuals in jail for up to seven years. Therefore, one must ensure timely payment of crypto tax.

Q3. In India, how much tax is levied on Bitcoin?

A. Tax on Bitcoin in India is 30% on profits and 1% TDS on transactions.

Q4. How much tax on crypto in India?

A. In India, cryptocurrencies are subject to 30% tax on profits and 1% TDS on transactions.

Q5. What is crypto tax in India?

A. Crypto tax in India refers to tax levied on crypto assets in India, including a flat 30% tax on crypto gains and a 1% Tax Deducted at Source (TDS) on transactions. 

Q6. Can losses incurred in crypto be offset against any income?

A. No, losses incurred in crypto cannot be offset against any income as per Section 115BBH.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.