How is crypto taxed in India?

Crypto taxes in India follow a dedicated regime for virtual digital assets, created in the 2022 budget. Gains from transferring crypto are taxed at a flat 30%, no matter how long you held the asset or what your income slab is. On top of that, a 1% TDS is collected on many transfers, which leaves a trail the tax department can follow.

What is section 115BBH and the 30% crypto tax in India?

Section 115BBH of the Income Tax Act, 1961 set the 30% rate on income from transferring a VDA. The Income Tax Department describes VDAs as crypto assets, NFTs and similar digital assets, but not Indian rupees, foreign currency or central bank digital currencies.

The rules are strict. When you calculate your gain, you can subtract only what you paid to acquire the asset. Fees and other expenses cannot be deducted. A 4% cess and any applicable surcharge are added to the 30% rate.

India moved to a new Income Tax Act, 2025, from April 1, 2026. It renumbers the sections but keeps the 30% rate, the 1% TDS and the same thresholds, so as of October 2026 the substance has not changed.

Can you set off crypto losses in India?

No. A loss on one VDA cannot be set off against gains from another VDA, against salary, or against any other income. It also cannot be carried forward to later years. That means if you gain on one coin and lose on another in the same year, you still pay 30% on the gain. Our guide to crypto losses and taxes shows how differently many other countries treat losses.

How does the 1% TDS on crypto work?

Section 194S requires the buyer to deduct 1% of the payment when buying a VDA from an Indian resident. In practice, when you trade on an Indian exchange that acts as the intermediary, the exchange deducts it before paying the seller. The rule took effect in July 2022.

There are thresholds. For "specified persons," such as individuals without business income, TDS applies once payments exceed 50,000 rupees in a financial year. For others, the limit is 10,000 rupees. Where the payment is made entirely in kind, such as a crypto-for-crypto trade, the payer must make sure the tax has been paid before releasing the asset.

Did Budget 2026 change crypto taxes in India?

Not the core rules. The budget presented on February 1, 2026 kept the 30% tax, the 1% TDS and the ban on offsetting losses. It did cut the maximum jail term for TDS defaults from seven years to two. It also added penalties for entities that fail to furnish required statements or file inaccurate ones. Gifts of crypto above 50,000 rupees from non-relatives can also be taxed in the hands of the recipient. For other countries, see crypto tax around the world.

Rules differ by country and change often. Check the tax authority or a qualified professional for your own situation.