Crypto under the Income-tax Act 2025: new sections
From 1 April 2026, 115BBH and 194S are gone. Where India's crypto tax rules now sit in the Income-tax Act 2025, what changed, and what didn't.
- Checked against the rules: Nov 2026
- Sources cited · No buy or sell calls
- Tax year 2026–27
Most crypto tax articles in India still quote Section 115BBH and Section 194S. Those sections belong to the Income-tax Act, 1961, which was replaced on 1 April 2026. Here's where the rules sit now.
The section map
| Rule | Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|---|
| Definition of virtual digital asset | Section 2(47A) | Section 2(111), now with an explicit "crypto-asset" limb |
| 30% tax on VDA transfers | Section 115BBH | Section 194, in its table of special rates |
| 1% TDS on VDA transfers | Section 194S | Section 393(1), Table serial no. 8(vi) |
| TDS thresholds (₹50,000 / ₹10,000) | Section 194S | Section 393(4) |
| Reporting by crypto platforms | Section 285BAA | Section 509 |
The thresholds, rates and the rule on payments in kind, such as crypto-for-crypto swaps, are the same.
What changed
- Tax year. The new Act uses a single "tax year" instead of the old "previous year" and "assessment year". Income earned from April 2026 to March 2027 belongs to tax year 2026–27.
- Forms. TDS forms have been renumbered under the Income-tax Rules, 2026. For example, the challan-cum-statement individuals use for P2P crypto TDS, formerly Form 26QE, is now Form 141.
- Crypto-asset reporting. Platforms' duty to report crypto transactions sits in section 509, which Budget 2026 backed with penalties. See the 2026 penalties.
- Definition. The VDA definition now explicitly includes "crypto-assets", matching international reporting standards.
What didn't change
- 30% tax on gains, plus cess.
- Only the cost of acquisition is deductible.
- Losses can't be set off or carried forward. See crypto losses.
- 1% TDS on transfers above the thresholds. See crypto TDS.
- No rebate or basic exemption against crypto tax. See crypto tax myths.
Which Act applies to your return?
- Income up to 31 March 2026 (FY 2025–26) is governed by the 1961 Act and filed in 2026 using its forms and section references.
- Income from 1 April 2026 falls under the 2025 Act.
If you're dealing with a notice or reassessment for an older year, the 1961 Act's provisions apply to that year.
Sources
- CalcGuru: crypto tax section map, 1961 Act to 2025 Act
- CryptoSlate: India VDA tax and TDS regime under the Income-tax Act 2025
- TDSMAN: TDS on virtual digital assets, section 393(1)
Frequently asked questions
Did the crypto tax rate change under the new Act?
No. It's still a flat 30% plus cess on gains from transferring VDAs.
Why do exchanges and tax apps still mention 194S?
Many haven't updated their wording, and FY 2025–26 returns still relate to the old Act. The obligation is the same.
Where can I read the new provisions?
On the Income Tax Department's website, which publishes both Acts. Search for the section numbers in the table above. Read the full rules in plain English in our complete crypto tax guide.
Did crypto tax change under the Income-tax Act 2025?
The rates didn't change: 30% plus cess on gains, 1% TDS. The section numbers changed, for example tax under section 194 and TDS under section 393.
Which year does the new Act apply from?
From 1 April 2026. Returns for earlier years still refer to the 1961 Act sections.
Sources
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