Crypto tax in India 2026: the complete guide
How crypto is taxed in India in 2026: the flat 30% tax, 4% cess, 1% TDS, the rules on losses, gifts and airdrops, and how to report it in your ITR.
- Checked against the rules: Nov 2026
- Sources cited · No buy or sell calls
- Tax year 2026–27
India taxes crypto under a special regime for "virtual digital assets", or . The label covers cryptocurrencies, stablecoins like USDT, and NFTs. The rules have been in force since April 2022, and the Union Budget for 2026–27 left them unchanged. This guide explains every part of them in plain English.
What counts as a virtual digital asset?
A VDA is any digital token or code generated through cryptography that can be transferred, stored or traded electronically. In practice that means Bitcoin, Ethereum, Solana, USDT, meme coins and most NFTs. India's digital rupee (the e₹, issued by the RBI) is not a VDA, and neither are gift cards or reward points.
The flat 30% tax on gains
When you transfer a VDA, any gain is taxed at 30%. Transfer means more than selling for rupees. It includes:
- Selling crypto for INR
- Swapping one coin for another, for example ETH to USDT
- Spending crypto on goods or services
The gain is simply what you received minus what you paid. Add 4% health and education cess on the tax, which makes the effective rate 31.2% before any surcharge. Surcharge applies only if your total income is above ₹50 lakh.
There is no basic exemption and no slab benefit. Someone with no other income still pays 30% on their first rupee of crypto profit.
1% TDS on transfers
Tax is also deducted at source (TDS) when you sell. 1% of the sale value is deducted, and on Indian exchanges the exchange does it for you, typically on every sale. Legally, TDS applies once the amount paid to you in a financial year crosses ₹10,000, or ₹50,000 when the buyer is a "specified person", such as an individual without business income.
TDS isn't an extra tax. It shows up in your and Annual Information Statement (), and you subtract it from the tax you owe when you file. If TDS is more than your tax, which often happens in a loss-making year, you get the difference back as a refund. Read how crypto TDS works and how to claim it back.
Losses: the strictest rule
A crypto loss cannot be:
- set off against salary, business or any other income,
- set off against a gain on a different crypto, or
- carried forward to future years.
So if you make ₹50,000 on Bitcoin and lose ₹50,000 on a meme coin, you still pay tax on the full ₹50,000 gain. More in crypto losses in India.
Gifts, airdrops, staking and mining
- Gifts: crypto received from a relative is not taxed. Gifts from non-relatives worth more than ₹50,000 in total during the year are taxed as income at your slab rate.
- Airdrops: generally treated as income when received, and the 30% rule applies when you later sell. See are airdrops taxable in India?
- Staking and DeFi rewards: commonly taxed as income on receipt, then at 30% on sale. See staking and DeFi income tax.
How to report crypto in your ITR
Crypto gains go in , which is available in ITR-2 and ITR-3 but not ITR-1 or ITR-4. Each transfer is reported with its acquisition date, transfer date, cost and sale value. Follow our step-by-step Schedule VDA guide, and check whether you need ITR-2 or ITR-3.
If you hold crypto on a foreign exchange, you may also need to disclose it in Schedule FA. See crypto on foreign exchanges.
What changed in Budget 2026?
The tax rates didn't change. The 30% tax and 1% TDS were retained. The Budget added penalties for platforms that fail to file crypto transaction statements, or file them wrongly. That means more of your activity will show up accurately in the tax department's records. Read what the new penalties mean for you.
The new Income-tax Act
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The VDA rules carried over, but section numbers changed. Older guides refer to Section 115BBH (the 30% tax) and Section 194S (TDS); under the new Act these sit in section 194 and section 393(1). See the full section map for the new Act.
Frequently asked questions
Is crypto tax-free if I don't withdraw to my bank?
No. Swapping one coin for another is a taxable transfer even if no rupees reach your bank account.
Do I pay tax on crypto I'm only holding?
No. Tax applies when you transfer. Holding crypto, even if its price rises, isn't taxed.
My income is below the tax limit. Does the 87A rebate cover my crypto tax?
No. The basic exemption and the Section 87A rebate can't be used against the 30% tax on crypto gains. See 12 crypto tax myths in India.
Are crypto futures taxed the same way?
Not necessarily. Treatment of futures and options is unsettled. Read crypto futures and options tax.
Is there any way to pay less than 30%?
Not legally on gains. You can avoid overpaying by keeping accurate cost records and claiming every rupee of TDS already deducted.
Is crypto income treated as capital gains or business income?
Either way, the 30% rate applies. The difference affects which ITR form you use and how you report it.
Sources
What changed
- : Updated section references for the Income-tax Act 2025. Tax rates unchanged.
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