Crypto futures and options tax in India explained
Are crypto futures taxed at 30% or as business income in India? The two views, how INR-settled and USDT-settled contracts differ, and how to file safely.
- Checked against the rules: May 2026
- Sources cited · No buy or sell calls
- Tax year 2026–27
Crypto futures and perpetuals now account for a large share of trading on many platforms used by Indians. Yet their tax treatment is one of the least clear areas of Indian crypto tax, and one of the most asked about.
Why it's unclear
India's 30% regime applies to the transfer of a virtual digital asset. A futures or options contract is a derivative: an agreement about a price, not necessarily the crypto itself. Whether a derivative counts as a VDA, or whether settling it involves a VDA transfer, isn't spelled out. The CBDT has not issued guidance specific to crypto derivatives.
The two main views
View 1: VDA income at 30%
- If a contract settles in USDT or another crypto, you receive a VDA, so each settlement looks like a VDA transaction.
- Under this view, gains are taxed at 30% plus cess, losses can't be set off, and income goes in Schedule VDA.
- It's the more conservative position for crypto-settled contracts on offshore platforms.
View 2: business income at slab rates
- If a contract settles entirely in rupees, with no crypto delivered, many professionals argue it isn't a VDA transfer at all.
- Profits are then business income. Whether that's speculative or non-speculative is itself debated, and it decides how losses can be used.
- Under this view, income is taxed at your slab rate, losses can be set off against eligible business income, and you file ITR-3 with the business schedule.
| Crypto-settled (e.g. USDT perpetuals) | INR-settled | |
|---|---|---|
| Crypto delivered at settlement | Yes | No |
| Likely treatment | VDA, 30% | Business income, slab rate |
| Loss set-off | No | Possible, depending on classification |
| Main schedule | Schedule VDA | Business income schedule in ITR-3 |
Don't forget the conversions
Even if futures profits are business income, converting rupees into USDT to fund an account, and USDT back into rupees, is a VDA transfer. Any gain on those conversions, including from the USDT INR premium, is taxed at 30%.
How to file safely
- Separate futures from spot in your records. Many exchange exports mix them.
- Note how each contract settles, in crypto or in INR, using the platform's documentation.
- Choose a position with your CA and keep a short note explaining why.
- Be consistent across years. Switching between views draws attention.
- Watch the business-income rules: turnover limits can require books of account and a tax audit.
- File ITR-3 if you report business income. See ITR-2 or ITR-3 for crypto.
Risks to weigh
Taking the business-income view can lower your tax and let you use losses, but if the tax department disagrees, you could owe the difference with interest. The conservative VDA view costs more but is less likely to be challenged. Many traders get a written opinion from their CA.
Frequently asked questions
Is there 1% TDS on crypto futures?
Platforms differ. TDS applies to VDA transfers, so it often appears on USDT conversions rather than on INR-settled contract profits. Check your AIS.
Can I set off futures losses against spot crypto gains?
No. Spot VDA gains can't be reduced by any loss, including futures losses.
What about crypto options?
The same debate applies. Settlement method matters most. Related: 12 crypto tax myths in India and the complete crypto tax guide.
Sources
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