As cryptocurrency adoption rises in India and globally, tax authorities are tightening the regulations around crypto transactions. If you’ve bought, sold, staked, mined, or received cryptocurrencies like Bitcoin, Ethereum, Solana, or any other digital asset, you’re liable to pay taxes on your gains.
This guide covers everything you need to know about filing taxes on cryptocurrency gains, how they’re calculated, reporting requirements, and tips to stay compliant.
📌 What Are Cryptocurrency Gains?
Cryptocurrency gains are the profits earned from selling or disposing of crypto assets. These gains are taxable under Indian tax laws (and most other countries). The gain is calculated as:
If you sold Bitcoin at ₹2,00,000 which you had purchased at ₹1,20,000, your capital gain is ₹80,000.
🧾 Is Cryptocurrency Taxed in India?
Yes. As per Union Budget 2022, income from virtual digital assets (VDAs) like cryptocurrencies is taxed at a flat 30% rate, plus surcharge and cess, effective from April 1, 2022.
Additionally:
- A 1% TDS (Tax Deducted at Source) is applicable on crypto transactions above ₹10,000 per year (₹50,000 for specified persons).
- No deductions are allowed except the cost of acquisition.
- Losses from crypto cannot be set off against other income or carried forward.
💡 Types of Taxable Crypto Events
Here are some common crypto-related activities and how they are taxed:
| Activity | Taxable? | Type of Tax |
|---|---|---|
| Selling crypto for INR | ✅ Yes | Capital gains @30% |
| Swapping crypto for crypto | ✅ Yes | Treated as sale, taxed |
| Receiving crypto as payment | ✅ Yes | Business/professional income |
| Mining rewards | ✅ Yes | Income from other sources |
| Airdrops or gifts | ✅ Yes | Taxed if value > ₹50,000 |
| Holding crypto (no sale) | ❌ No | Not taxed until sold |
📊 Table: Tax Rates on Cryptocurrency in India (FY 2024-25)
| Nature of Income | Tax Rate | Deduction Allowed | Set-Off Allowed |
|---|---|---|---|
| Income from crypto sales | 30% + cess | Only cost basis | ❌ Not allowed |
| Mining/Airdrop/Staking rewards | As per slab rate | Yes (expenses) | ✅ Yes |
| TDS on transfers (Section 194S) | 1% of sale value | NA | NA |
📁 Reporting Cryptocurrency Gains in ITR
Cryptocurrency gains must be reported in ITR-2 or ITR-3, depending on the nature of income.
If you’re an investor:
- Use ITR-2
- Report under Schedule VDA
If you’re a trader/professional:
- Use ITR-3
- Show as business income
You’ll need to provide:
- Type of VDA (Bitcoin, Ethereum, etc.)
- Date of acquisition and sale
- Cost of acquisition
- Sale value
- TDS deducted (if any)
🧮 Sample Calculation of Crypto Gains
Scenario: You bought Ethereum for ₹1,00,000 and sold it for ₹1,80,000 on a crypto exchange.
| Particulars | Amount (₹) |
|---|---|
| Selling Price | ₹1,80,000 |
| Purchase Price | ₹1,00,000 |
| Capital Gain | ₹80,000 |
| Tax @30% | ₹24,000 |
| Cess @4% | ₹960 |
| Total Tax Payable | ₹24,960 |
If the sale exceeded ₹10,000 and was done on an exchange, TDS of 1% = ₹1,800 would already be deducted and reflected in Form 26AS.
🔁 Crypto-to-Crypto Transactions Are Also Taxed
Even if you swap Bitcoin for Ethereum, it is treated as a sale for tax purposes.
Example:
- Buy Bitcoin at ₹1,00,000
- Exchange for Ethereum worth ₹1,40,000
Capital gain = ₹40,000 → Tax = ₹12,000 + cess
📂 How to File TDS for Crypto Transactions (Section 194S)
If you’re buying crypto through a peer-to-peer or OTC platform (not an exchange that deducts TDS), you are responsible for deducting and filing Form 26Q or 26QE.
- File Form 26QE (for individuals)
- Deposit TDS within 30 days
- Generate TDS certificate (Form 16E)
Note: Most Indian exchanges like WazirX, CoinDCX, and CoinSwitch now handle this for you.
📉 Can You Claim Losses from Crypto?
Unfortunately, crypto losses cannot be adjusted against:
- Other capital gains (e.g., stock market)
- Business income
- Future crypto profits
This is explicitly disallowed by Indian tax law.
🔐 Tips to Stay Compliant While Filing Crypto Taxes
- Keep detailed records – Dates, amounts, wallet addresses, transaction IDs
- Use a crypto tax tool – Platforms like KoinX, CoinTracker, ZenLedger simplify tax reporting
- Reconcile TDS with Form 26AS – Match what the exchange deducted
- Don’t hide transactions – Blockchain is traceable, and tax notices have increased
- Consult a CA – Especially if you have frequent trades or high-value transactions
🌐 Tax Filing for Crypto in Other Countries (Quick Glance)
| Country | Tax Rate on Crypto Gains | Notes |
|---|---|---|
| USA | 10%–37% (based on income) | Short-term vs long-term gains |
| UK | 10% or 20% (Capital Gains Tax) | £12,300 annual exemption (2024) |
| Canada | 50% of gains taxable | Treated as capital gain or business income |
| Australia | CGT rules apply | Discounts for holding >12 months |
| Singapore | 0% | Crypto gains not taxed currently |
📅 Deadlines for Crypto Tax Filing (India FY 2024–25)
| Event | Due Date |
|---|---|
| TDS deposit (monthly) | 7th of next month |
| TDS return filing (Q1) | 31st July 2025 |
| ITR filing (non-audit cases) | 31st July 2025 |
| ITR filing (audit cases) | 31st October 2025 |
💬 Frequently Asked Questions (FAQs)
🔹 Is crypto taxed even if I didn’t convert it to INR?
Yes. Even crypto-to-crypto swaps are considered disposal, hence taxable.
🔹 Do I need to pay tax on airdrops or staking rewards?
Yes. They are treated as income from other sources and taxed as per slab.
🔹 Will exchanges report my data to the tax department?
Yes. SEBI-registered and compliant exchanges report TDS and transaction data to the Income Tax Department.
🔹 How do I report foreign crypto exchanges?
You need to disclose foreign assets in Schedule FA if using non-Indian wallets/exchanges.
🧾 Final Words: File Smart, Stay Legal
Crypto taxation is no longer a grey area in India. The government has made it clear that gains from cryptocurrencies and virtual digital assets are taxable—and ignorance won’t protect you from penalties or tax scrutiny.
Whether you’re a casual investor or an active trader, using a reliable crypto tax calculator, tracking your trades, and filing accurate returns is the smart way forward.
Start preparing early, especially if you’ve transacted on multiple platforms. If your crypto activity is significant, consult a chartered accountant (CA) or a crypto tax expert to ensure full compliance.