How crypto is taxed in India
From 1 April 2022, profits from transfer of Virtual Digital Assets (VDA) — cryptocurrencies, NFTs, and similar digital tokens — are taxed under a special regime introduced by the Finance Act 2022.
| Item | Rate / rule |
|---|---|
| Tax on profit (Section 115BBH) | 30% flat, regardless of holding period |
| Health & education cess | 4% on the tax |
| TDS on transfer (Section 194S) | 1% on sale value (above ₹10,000 / ₹50,000) |
| Deductions allowed | Only cost of acquisition |
| Loss set-off | Not allowed against any head — including other VDAs |
| Loss carry-forward | Not allowed |
How the calculation works
The 1% TDS is deducted by the exchange at the time of transfer and is adjusted against your final tax liability when you file your ITR. If TDS exceeds your final tax, you can claim a refund.
Worked example
You bought ₹1,00,000 worth of Bitcoin and sold it for ₹1,50,000.
- Profit = ₹1,50,000 − ₹1,00,000 = ₹50,000
- Tax @ 30% = ₹15,000
- Cess @ 4% = ₹600
- Total tax payable = ₹15,600
- TDS deducted by exchange @ 1% of ₹1,50,000 = ₹1,500 (adjustable against the ₹15,600)
- Net amount in your hand after tax = ₹1,50,000 − ₹15,600 = ₹1,34,400
FAQ
Does the 30% rate apply even if I held the coin for years?
Yes. Unlike equity or property, there is no concept of long-term vs short-term capital gain for crypto. The flat 30% rate applies regardless of holding period.
Is 1% TDS deducted on every trade?
It applies to every transfer of a VDA above the threshold (₹10,000 in a financial year, or ₹50,000 for specified persons such as individuals/HUFs not subject to tax audit). Indian exchanges deduct it automatically.
What if I made a loss on one coin and a profit on another?
Each transaction is taxed in isolation. A loss on one coin cannot reduce the profit on another — you still pay 30% on the gaining trade and the loss is simply forgone.
Does surcharge apply?
Yes. Standard surcharge slabs apply on top of the 30% tax if your total income for the year exceeds ₹50 lakh — 10% (above ₹50L), 15% (above ₹1Cr), 25% (above ₹2Cr), 37% (above ₹5Cr). This calculator shows the base 30% + 4% cess; add surcharge if applicable.
Are airdrops, staking rewards, and gifts taxed too?
Yes. Receiving a VDA without consideration (airdrops, gifts above ₹50,000 from non-relatives) is taxable at slab rates as "income from other sources" at the time of receipt. A subsequent sale is then taxed at 30% on the further gain.