Are crypto airdrops taxable in India?
How airdropped tokens are taxed in India: income when received, 30% when you sell, the cost basis question, and how to keep records for your ITR.
- Checked against the rules: May 2026
- Sources cited · No buy or sell calls
Airdrops feel like free money, but in India the tax department sees them as income. There are two separate moments that can create tax: when the tokens arrive, and when you sell them.
Moment 1: when you receive the airdrop
The common professional view is that an airdrop is income at the time you receive it, measured at the tokens' fair market value in rupees on that date. It is usually reported as "income from other sources" and taxed at your normal slab rate.
Some advisers instead treat airdrops like a gift from a non-relative, which is taxable only if the total value of such receipts in the year is above ₹50,000. Both views lead to tax on meaningful airdrops; they differ for small amounts.
A third view, common in Indian crypto communities, is that nothing is taxed until you sell, and that the whole sale value is then taxed at 30% because the cost is zero. It's simpler, and it can mean more tax on the eventual sale, but it isn't the prevailing professional view for airdrops with a clear value on receipt.
If the airdrop was a reward for work, such as testing a protocol, creating content or running a node, it looks more like income for services, which points to slab-rate taxation.
Moment 2: when you sell or swap
When you transfer the airdropped tokens, the transfer falls under the VDA rules:
- gains are taxed at 30% plus 4% cess,
- 1% TDS applies on Indian exchanges, and
- losses can't be set off.
The open question is your cost of acquisition. If you were taxed on the value when you received the tokens, it is reasonable to treat that value as your cost. If you weren't, the cost may be treated as zero, making the entire sale value a gain. Discuss your position with a tax professional and apply it consistently.
An example
You receive 1,000 tokens worth ₹20 each, so ₹20,000, on the day they reach your wallet. Three months later you sell them for ₹30,000.
| Event | Tax treatment |
|---|---|
| Receive ₹20,000 of tokens | Income from other sources, taxed at your slab rate |
| Sell for ₹30,000 | Gain of ₹10,000 (using ₹20,000 as cost), taxed at 30% + cess |
If you sold instead for ₹15,000, the ₹5,000 fall can't be set off against anything. Check the numbers in the crypto tax calculator.
Records to keep
For every airdrop, note:
- the date the tokens arrived and the wallet address,
- the number of tokens,
- their price in rupees on that date, with the source you used, and
- what the airdrop was for: an eligibility snapshot, a task or a reward.
Blockchain explorers show the transaction; price sites show historical values. Screenshots help if you're asked later.
Watch out for scam airdrops
Unknown tokens that appear in your wallet with a link to "claim" more are often scams designed to steal your funds. Don't interact with them. Read how airdrops work and how to spot the scams.
Frequently asked questions
Do I pay tax if I never sell the airdrop?
Under the common view, yes: tax arises when you receive it. There's no further tax until you transfer it.
Where do I report airdrops in my ITR?
The receipt usually goes under income from other sources. The later sale goes in Schedule VDA. See how to fill Schedule VDA and the full crypto tax guide.
What if the token had no price when I received it?
If there was no market and no reliable value, many professionals take the value as nil at receipt, which means a zero cost when you sell. Keep evidence that no market existed.
Sources
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