How is Cryptocurrency Taxed in India? Save 60% on Crypto Tax Filing!

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If you traded crypto in FY 2024-25, it needs to be reported your gains and disclose all trades in the VDA (virtual digital assets) schedule, covering cryptocurrencies and NFTs.

In India, the taxation of cryptocurrency is governed by specific rules introduced in the Finance Act of 2022, which became effective from April 1, 2022.

Taxcellent will Assist in Knowing How Crypto is Taxed in India?

1. Flat Tax on Gains (Section 115BBH)

• Rate: 30% flat tax on income from the transfer of Virtual Digital Assets (VDAs), including cryptocurrencies and NFTs.
• No deductions allowed except the cost of acquisition (i.e., you can’t deduct mining expenses, gas fees, or other costs).
• No set-off or carry-forward of losses from crypto trades against other income or future crypto gains.

Illustration: If you bought Bitcoin for ₹1,00,000 and sold it for ₹1,50,000:

• Gain: ₹50,000
• Tax: 30% of ₹50,000 = ₹15,000
• Health & Education Cess (4% on tax): ₹600
• Total Tax Payable: ₹15,600

2. 1% TDS on Transfers (Section 194S)

• Effective from July 1, 2022
• A 1% TDS (Tax Deducted at Source) is deducted on the transfer of crypto assets if the total amount exceeds:
  • ₹10,000 in a financial year for regular users, or
  • ₹50,000 for specified persons (like individuals/HUFs not engaged in business or profession).

Note:

• TDS is applicable on the gross amount.
• The buyer is responsible for deducting TDS and depositing it with the government.

3. Gift Taxation

• Crypto received as a gift is taxable if the value exceeds ₹50,000 and is not from a specified relative.
• It will be taxed as “Income from Other Sources.”

4. Classification of Crypto:

• The government treats cryptocurrencies as Virtual Digital Assets (VDAs) but not as currency. This classification impacts how they are taxed—similar to capital assets but with stricter rules.

5. GST on Crypto Transactions

• Though not directly part of income tax, crypto exchanges may charge GST (Goods and Services Tax) on transaction fees.
• As of now, GST is not directly charged on crypto transfers between individuals, but this may evolve.

6. Summary Table

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