Do you regularly trade or invest in cryptocurrencies or other virtual digital assets?
If you answer yes, you must pay cryptocurrency taxes in India.
But how much are you aware of laws on crypto tax in India? How much are you liable to pay on profits? What about airdrops, minting, mining, or NFTs? And what about crypto donations?
All these situations and scenarios require you to understand the entire crypto landscape of India in detail. Anybody investing in or trading cryptocurrencies or similar assets is supposed to pay crypto tax in India.
But how much?
And what about the different types of transactions? How does tax on crypto in India works?
How Is Cryptocurrency Taxed In India?
In 2022’s financial budget, the Indian government introduced a bill introducing a crypto tax in India. India considers crypto to be a virtual digital asset and levies 30% tax (with 4% cess and any applicable surcharge) on profits from trading cryptos.
Crypto Tax in India: Key Regulations
Here’s a breakdown of the key provisions:
Section 2(47A)
This section defines Virtual Digital Assets (VDAs), covering cryptocurrencies, NFTs, and similar digital assets, under the Income Tax Act.
Section 115BBH (Effective from April 1, 2022):
A flat 30% tax (plus 4% health and education cess) is levied on profits arising from the transfer of VDAs, such as trading, selling, or spending cryptocurrencies.
- No deductions are allowed except the cost of acquisition.
- Losses from crypto cannot be offset against other gains.
Section 194S (Effective from July 1, 2022):
A 1% Tax Deducted at Source (TDS) is applicable on VDA transfers if:
- The total value exceeds ₹10,000 in a financial year (₹50,000 for specific categories like individuals without business income)
- Applies to both Indian and foreign crypto exchanges
Who Deducts TDS?
- If the transaction occurs via an Indian exchange, the exchange automatically deducts TDS and remits it to the government.
- If using a foreign exchange or engaging in peer-to-peer (P2P) trades, the buyer must deduct and file the TDS.
Uniform Application:
The 30% tax and 1% TDS apply to all taxpayers, regardless of income level, and do not distinguish between short-term and long-term gains.
Important Deadline:
- File ITR by July 31, 2025.
- Belated returns are allowed till December 31, 2025, with penalties.
Latest Updates On Crypto Tax India
Since the introduction of crypto tax laws in India, there has been quite a few significant updates related to the same, let’s have a look at them.
FY 2024-25: Unreported crypto gains will be treated as undisclosed income and taxed at 60% under block assessment from February 1, 2025 (pending enactment of the Finance Bill).
FY 2023-24: Crypto income must be disclosed correctly.
- Capital Gains → ITR-2
- Business Income (e.g., frequent trading) → ITR-3
FY 2022-23: A dedicated Schedule VDA was introduced in ITR forms to report crypto transactions.
TDS Non-Compliance Penalties:
- Section 271C: Penalty = Tax not deducted or paid.
- Section 276B: Jail up to 7 years + Fine (up to 200%) for wilful evasion.
Financial Year 2024-2025
In the Union Budget 2025, the government proposed a significant amendment to the Income Tax Act by including Virtual Digital Assets (VDAs) under the definition of undisclosed income. This means that any unreported crypto holdings or gains discovered during a tax search may now be taxed under the block assessment framework at 60%, along with surcharge and cess.
The provision is set to take effect from 1 February 2025, once the Finance Bill is enacted. This move reinforces the government’s intent to tighten compliance and bring greater transparency to crypto transactions in India.
Financial Year 2023-2024
As of 2023, individuals investing in crypto and other virtual digital assets must disclose their income. If held as part of an investment portfolio, the gains should be declared capital gains. The assets should be reported as business income if they are fit for trading purposes. It’s important to note that individuals with business income should use ITR-3, not ITR-2, for filing.
Financial Year 2022-2023
For the financial year 2022-2023, the Income Tax Return now includes a dedicated section known as the Schedule Virtual Digital Assets. It is designed to report gains from crypto and other virtual digital assets.
Penalties for non-compliance with cryptocurrency taxation in India have been introduced, including the failure to deduct TDS (Tax Deducted at Source) and the failure to deposit TDS, as outlined in sections 271C and 276B.
The 30% Tax Rate On Cryptocurrency In India
The 2024 Indian Financial Budget introduced us to a pretty hefty tax rate on the cryptocurrency forefront. This 30% tax rate applies to the following:
- Trading cryptocurrencies with INR
- Exchanging cryptocurrencies for other cryptocurrencies
- Spending cryptocurrencies for goods or services.
Even though the 30% tax rate applies to trading, selling, or spending cryptos, plenty of other events are taxed differently.
Let’s examine these transactions and discover how crypto tax in India functions.
Let’s explore all these types of transactions and understand how they are taxed in India.
Income Tax On Crypto Transactions
The ITD may consider your cryptocurrency transactions taxable income. In such cases, you must pay taxes at the individual tax rate upon receiving the income. This applies to various scenarios, including:
- Receiving crypto as a gift
- Mining crypto coins
- Receiving payment in cryptocurrency.
- Earning staking rewards.
- Receiving airdrops.
If you later decide to sell, trade or use the tokens acquired through the above scenarios, you will have to pay a CGT tax of 30% on any gains you make.
Individual Tax Rates For FY 2024-2025
Here’s the new tax slab presented in the budget for 2024 for people aged up to 60.
Tax Slab | Rates |
Up to Rs. 3,00,000 | NIL |
Rs. 300,000 to Rs. 6,00,000 | 5% on income which exceeds Rs 3,00,000 |
Rs. 6,00,000 to Rs. 900,000 | Rs 15,000 + 10% on income more than Rs 6,00,000 |
Rs. 9,00,000 to Rs. 12,00,000 | Rs 45,000 + 15% on income more than Rs 9,00,000 |
Rs. 12,00,000 to Rs. 1500,000 | Rs 90,000 + 20% on income more than Rs 12,00,000 |
Above Rs. 15,00,000 | Rs 150,000 + 30% on income more than Rs 15,00,000 |
Income Tax Slab For Citizens Aged Between 60 to 80 Years
Tax Slabs | Rates |
Rs. 2.5 lakhs | NIL |
Rs. 2.5 lakhs – Rs. 3 lakhs | NIL |
Rs. 3 lakhs – Rs. 5 lakhs | 5.00% |
Rs. 5 lakhs – Rs. 10 lakhs | 20.00% |
Rs. 10 lakhs and more | 30.00% |
Income Tax Slab For Citizens Aged Above 80 Years
Tax Slabs | Rates |
Rs. 0 – Rs. 5 lakhs | NIL |
Rs. 5 lakhs – Rs. 10 lakhs | 20.00% |
Above Rs. 10 lakhs | 30.00% |
Understanding Crypto TDS
TDS Rate: 1% on the sale/transfer of VDAs.
Effective From: July 1, 2022.
Applies When: Annual transaction value exceeds ₹10,000 (or ₹50,000 for specific individuals).
Responsibility:
- Indian exchanges auto-deduct TDS.
- Foreign exchange users must deduct and file TDS manually.
- P2P buyers must manually deduct and file TDS.
Purpose: TDS ensures crypto trades are traceable and taxes are collected at the source.
Note: Failure to deduct or remit TDS can result in heavy penalties and jail time under Sections 271C and 276B.
Tax Deductible at Source (or TDS) was introduced alongside India’s 30% crypto tax under the Financial Budget 2022.
TDS aims to charge crypto investors and traders at the source for any transactions they make. When TDS is deducted, a person (the deductor) who owes a specific amount to another person or party (deductee) must deduct the TDS amount from the total invoice value/ payment at the source and remit it to the central government.
This TDS amount on crypto in India is deducted at 1%.
Since July 01, 2024, the buyer will deduct TDS at the 1% rate when paying the seller for the transfer of Crypto/NFT. If the transaction is made on an exchange, the exchange might deduct the TDS and pay the remaining balance amount to the seller.
Indian exchanges automatically deduct the TDS.
However, If a taxpayer trades on foreign exchanges, they must manually deduct TDS and file their TDS returns.
The TDS on cryptocurrency in India might be a dynamic approach as it might change over time. However, we can now understand the implications of this 1% TDS and how it affects you and your crypto trades.
New Penalties For Non-Compliance With TDS In The Crypto Space
Crypto investors in India are facing significant consequences. This follows the recent announcement by the Indian government, emphasising strict measures against traders not adhering to TDS rules.
Under the new regulations, failure to deduct and pay TDS to the government can result in penalties. This can be as grave as amounting to 100% of the TDS value.
In some instances, offenders may also be subject to imprisonment. The period designated ranges from 3 months to 7 years, along with a fine.
Let’s delve into the details of the legislation with illustrative examples.
Section 271C: Penalty For TDS Deduction Failure
If taxpayers neglect to deduct TDS, they may be penalised. This penalty is equivalent to the TDS amount due, as determined by the Joint Commissioner.
Example:
Aman bought Bitcoin worth INR 100,000. According to Section 194S, he must deduct 1% TDS before paying the seller.
If Aman fails to deduct the 1% TDS (INR 1,000) and submit it to the government. In such a case, he could face an INR 1,000 penalty imposed by the Joint Commissioner.
Section 276B: Failure To Remit TDS To The Government
Any taxpayer failing to remit TDS to the government may face imprisonment for a period ranging from 3 months to 7 years. Upon application by the ITD and with the prior approval of the Joint Commissioner, the court can impose a fine and imprisonment.
Example:
If Aman deducted the 1% TDS (INR 1,000), however, he failed to deposit it with the government. Aman could potentially be sentenced to 3 months to 7 years in jail and a fine
These new measures underscore the government’s commitment to enforcing TDS compliance in the crypto sector. It also urges investors to diligently follow the rules to avoid severe penalties and legal consequences.
Tax On Lost Or Stolen Cryptos
The Income Tax Department has not provided explicit guidance regarding lost or stolen cryptocurrencies. Drawing insights from past rulings by Indian courts on the loss or theft of different types of assets, it appears that no tax liability is incurred on crypto that is lost due to hacking, scams, or theft.
Despite this, claiming and offsetting a loss from a lost or stolen crypto asset against gains might be challenging. This is due to the ITD’s strict position on such offsetting.
However, investors should be aware that even though there may not be a tax obligation for the lost crypto, offsetting losses against gains might face hurdles according to the ITD’s stringent approach.
Transactions That Are Free of Cryptocurrency Tax In India
Not every transaction is subject to crypto tax in India. Here’s a breakdown of when you won’t have to pay taxes on your crypto:
HODLing Crypto
Holding onto your cryptocurrency without engaging in any transactions is tax-free in India.
Transferring Crypto Between Your Wallets
Moving your crypto assets between your wallets also does not attract liabilities.
Receiving Gifts Of Crypto
You can receive crypto gifts without worrying about taxes under the following circumstances:
- Receiving a gift of crypto up to INR 50,000 from friends and relatives.
- Receiving a gift of any amount of crypto from close family members.
Hence, if you are holding onto your crypto, transferring it between your wallets, or receiving crypto gifts within the specified limits from friends and relatives, you won’t be required to pay taxes on these transactions in India.
Crypto Tax Breakdown by Transaction Type in India
Understand how different types of crypto transactions are taxed under Indian law.
This quick-reference table outlines the tax treatment, applicable tax rates, and key compliance rules for each category, from airdrops and mining to NFT trading and P2P transfers.
Transaction Type | Tax Type | Tax Rate | Quick Summary |
Tax On Airdrops | Income + Capital Gains | Slab rate + 30% CGT | Taxed as income on receipt; CGT on sale of airdropped tokens. |
Tax On NFT Trading | Capital Gains + TDS | 30% CGT + 4% cess + 1% TDS | Fiat NFT buys are not taxed; crypto swaps & sales attract CGT & TDS. |
Tax On Mining | Income + Capital Gains | Slab rate + 30% CGT | Rewards taxed as income; CGT applies on sale; deductions if business income. |
Tax On Staking | Income + Capital Gains | Slab rate + 30% CGT | Staking rewards are taxed as income; sales are taxed under 30% CGT. |
Tax On Crypto Gifts | Income | Slab rate (if > ₹50K) | Gifts from family or < ₹50K are tax-free; others are taxed as income. |
Tax On Crypto Salary | Income + Capital Gains | Slab rate + 30% CGT | Salary in crypto is taxed as income; disposal is taxed at 30% CGT. |
Tax On Crypto Donations | Capital Gains | 30% CGT + 4% cess | Donating crypto = disposal; taxed under CGT provisions. |
Tax On Referrals | Income + Capital Gains | Slab rate + 30% CGT | Referral rewards are taxed on receipt and sale. |
Tax On Token Sales (ICO/IDO) | Income + Capital Gains | Slab rate + 30% CGT | Airdrops are taxed as income; later sales are taxed under CGT. |
Tax On Futures/Derivatives | Business Income + CGT + TDS | Slab rate + 30% CGT + 1% TDS | Gains are taxed as business income; INR conversion gains are taxed under CGT + TDS. |
Spot & Margin Trading | Capital Gains + TDS | 30% CGT + 4% cess + 1% TDS | Flat 30% tax; no offsets; 1% TDS applies. |
DeFi Income | Income + Capital Gains | Slab rate + 30% CGT | DeFi rewards are taxed as income; CGT applies on use/sale. |
Income from Crypto Consultancy | Income + Capital Gains | Slab rate + 30% CGT | Crypto consulting income is taxable; CGT on token disposal. |
P2P Transactions | Capital Gains or Block Assessment | 30% CGT | Missing KYC may trigger a 60% tax under block assessment. |
Now, let’s break down how each type of crypto transaction is taxed in India, along with examples, rules, and key things to keep in mind.
Whether you’re a trader, investor, or someone receiving crypto as income, understanding the nuances can help you stay compliant and avoid costly mistakes
Tax On Airdrop
Airdrops are the initial tokens or coins you usually receive before a crypto project starts.
In India, crypto airdrops are treated as “Income from Other Sources” and are taxed according to the individual tax slab. This tax is calculated based on the fair market value of the tokens when you receive them, even though you didn’t buy them.
Later, if you sell, swap, or use the airdropped tokens, you’ll be subject to a flat capital gains tax rate of 30%.
This tax is applied to the difference between the fair market value on the sale date and the value when you received the airdrop, with an additional 4% health and education cess.
Example:
Ravi received 10,000 ABC tokens for holding 100 XYZ tokens, on April 1st, 2024, on that day the fair market value of ABC tokens was INR 10.
Ravi will be liable to pay tax at his slab rate on the ABC tokens he received, so he’ll pay Income Tax on INR 1,00,000.
If he later sells them at INR 20 each, his taxable gains would also be INR 1,00,000. With a 30% tax rate, he owes INR 30,000 in taxes.
Important: Crypto airdrops are considered gifts for tax purposes and could be eligible for tax exemption. However, you will qualify for a tax exemption if the total value of airdrops and gifts you receive in a year is within Rs 50,000.
Tax On NFT Trading
Non-fungible tokens (or NFTs) are taxed based on the nature of the transaction. Here’s how NFT taxes function in India:
Buying NFTs with Fiat Currency
Buying NFTs with fiat currencies such as INR or USD isn’t taxable.
Buying NFTs with Cryptocurrency
Buying NFTs using cryptocurrencies such as Ethereum and Polygon Matic is taxable. This exchanging of cryptocurrency for NFTs is considered an act of crypto disposal. Any gain from this transaction will be taxed at a flat rate of 30% plus a 4% health and education cess.
Selling NFTs
Any gains enjoyed on selling NFTs will also be taxed at a flat rate of 30%. One must also pay a 4% cess on the Capital Gains Tax amount. The buyer will also deduct a 1% TDS of the selling amount.
Tax On Mining Cryptocurrency
Crypto mining in India is subject to income tax, with the type of income determined by the scale of mining activities.
If you mine crypto on a significant scale for profit, it’s classified as business income. You’re taxed based on regular slab rates and can claim deductions for expenses like mining rigs and electricity bills.
However, if mining is more of a hobby, the rewards are considered “Income From Other Sources,” and no deductions are allowed.
Selling mined crypto incurs a flat 30% capital gains tax rate plus a 4% health and education cess. Additionally, exchanges may charge a 1% TDS on sales.
Tax On Crypto Staking
Staking cryptocurrency in India incurs income tax on the fair market value of the staking rewards received in INR. This applies regardless of whether you sell the tokens.
Additionally, any profits from selling, swapping, or spending staking rewards are subject to a 30% capital gains tax plus a 4% health and education cess.
Furthermore, a 1% TDS is applicable on the selling price of the cryptocurrency deducted by the buyer.
Example:
Assume you stake 100 “X” coins to a validator that offers a 10% APR. Every year, you will receive 10% interest on your asset. This means your net asset will be 100+(100×10%)= 110 after one year. That implies you’ll receive 10÷365= 0.027% interest every day or 10÷12= 0.833% interest per month.
Tax On Crypto Gifts
As per the Indian Tax Department, crypto gifts are movable property gifts. Hence, here are the types of crypto gifts that do not attract any taxes in India:
- You do not have to pay taxes if you’ve received cryptocurrency gifts valued below INR 50,000 in a financial year.
- Crypto gifts from immediate family members, such as parents or siblings, do not incur crypto taxes in India.
- Crypto gifts received as wedding gifts, inheritances or in contemplation of death also remain tax-free in India.
However, if you have received crypto gifts exceeding the value of INR 50,000, then you will have to pay Income Tax based on the individual slab rate.
Tax On Crypto Salary
When you receive cryptocurrency as a salary in India, it’s taxed like any other income received in INR.
You pay income tax based on the cryptocurrency’s market value converted to Indian Rupees on the day you receive it, according to your income tax slab.
If you sell, exchange, or relinquish the cryptocurrency received as a salary, it’s treated as disposal and taxed at a flat rate of 30%, plus a 4% cess on the taxable amount.
Additionally, a 1% TDS is deducted by the buyer on the selling price of the cryptocurrency.
Tax On Crypto Donations
In India, crypto donations are taxed similarly to other cryptocurrency transactions. This means that any cryptocurrency donations are subject to capital gains tax.
Capital gains tax applies to profits made from selling or exchanging cryptocurrencies.
Donating crypto in India is seen as disposing of digital assets, and any resulting gains are taxed at a flat rate of 30%, plus a 4% health and education cess.
Tax On Crypto Referrals
In India, referral rewards earned through cryptocurrency are considered additional income. The tax rate on the fair market value of the cryptocurrency received depends on the taxpayer’s total annual income and can range from 0% to 30%.
When you sell, swap, or use the crypto rewards, you’re subject to Capital Gains Tax (CGT) at a flat rate of 30%, plus a 4% health and education cess on the CGT amount.
Tax On Token Sales (ICOs And IDOs)
Income from ICOs and IDOs, including airdropped coins, is considered “Income From Other Sources” (IFOS).
The tax authorities add the fair market value of received tokens to your annual income and tax it at 0-30%, depending on your tax slab.
When you exchange primary tokens like Ethereum and Bitcoin for ICO stakes, you are treating it as a crypto disposal. Profits from selling these tokens are taxed at a flat rate of 30%, plus a 4% health and education cess.
Selling tokens acquired from ICO or IDO airdrops also incurs capital gains tax at the same rate mentioned above.
Tax On Futures/Derivatives Trading
Crypto futures trading involves buying or selling a specified amount of cryptocurrency at a predetermined price for future delivery. You can profit from price movements without owning the actual asset. It offers opportunities for speculation, hedging, and leveraging but carries risks due to market volatility.
Calculating the crypto trading tax in India based on the gains from futures trading can be a task. In India, the taxation of cryptocurrency futures trading involves several key considerations to ensure compliance with tax laws. Here’s a detailed explanation:
Initial Investment Stage
When an investor purchases cryptocurrency like USDT to participate in futures trading, this initial acquisition is treated as an investment. No tax is levied at this stage because it represents the entry point into the trading activity, similar to purchasing stocks or commodities.
Note: A few exchanges allow crypto futures trading in INR.
Profit Realisation and Taxation
Once trading begins and profits are realised, these gains are categorised as speculative business income under Indian tax regulations. The taxable amount is computed based on the difference between the conversion rate used to calculate the profit and the rate at which the initial investment was made.
This ensures that the profit generated from futures trading is accurately reflected and subject to taxation according to the individual’s income tax slab rate.
Read More: Tax on Crypto Futures Trading in India
Example:
Avani trades crypto futures, and here’s how her tax liability is calculated:
Trade Summary:
Buys 1000 USDT @ ₹85 —
No tax at this stage
Makes a profit of 2000 USDT
Profit realised @ ₹86 = ₹1,72,000
This is treated as speculative business income and taxed per her income tax slab.
Other Crypto Trading Tax In India
So, how are other crypto trading taxed in India? Let’s begin with crypto spot trading.
Spot Crypto Trading Tax In India
Crypto spot trading involves buying and selling digital assets for immediate delivery. Transactions occur instantly at the current market price, settling “on the spot” without the need for future delivery contracts. Now comes the question of how it is taxed.
In India, crypto spot trading is taxed uniformly at a flat rate of 30%, plus a 4% health and education cess under Section 115BBH of the Income Tax Act. This taxation applies irrespective of the holding period, eliminating distinctions between short-term and long-term gains. A 1% TDS is applicable on sale transactions exceeding Rs. 50,000 annually, starting July 1, 2022, covering the entire sale value.
Importantly, no deductions or exemptions are permitted. This is in exception for the cost of acquiring the crypto asset, preventing offsetting losses from one trade against gains from another.
Margin Crypto Trading Tax In India
Crypto margin trading allows you to borrow funds, magnifying your market exposure beyond your initial investment. Using leverage, you can amplify profits and increase the risk of substantial losses.
Crypto gains, including those from margin trading, face cryptocurrency taxation in India as income from virtual digital assets (VDAs) under Section 115BBH of the Income Tax Act, 1961. Brace yourself for a flat 30% tax rate, applicable surcharge and a 4% cess.
Now, let’s delve into the details of margin trading taxation.
Profits incurred from closing leveraged positions are subject to the 30% VDA tax. This is calculated as the sale price minus the acquisition cost, which includes borrowed funds.
Unfortunately, VDA losses can’t offset other income categories and can only be carried forward for eight years. Forced liquidations due to margin calls are taxable events, with the sale price determining the profit or loss. Also, gains from crypto derivatives fall under the 30% VDA tax slab.
Starting July 1, 2022, a 1% TDS applies to cryptocurrency transfers exceeding INR 50,000 (or INR 10,000 for specific categories) on exchanges. It’s essential to note that this TDS isn’t your final tax liability but serves as an advance payment. Stay informed and navigate the crypto tax landscape with caution.
Tax On DeFi Income In India
The ITD has yet to provide specific instructions regarding decentralised finance (DeFi) transactions. To understand the tax implications, we should look at the current rules outlined in the Income Tax Act.
Here are some DeFi transactions that might be subject to taxation at your tax rate:
- Earning New Tokens: This includes tokens gained through liquidity mining, governance activities, or as rewards.
- Referral Rewards: Any rewards received through referral programs may be taxable.
- Play-To-Earn Income: Income generated from play-to-earn activities within the DeFi space could be subject to taxation.
- Browse-to-Earn Platforms: Platforms such as Permission.io or Brave, where users earn rewards for browsing, may also have tax implications.
Even if you paid taxes upon receiving the tokens, it’s important to remember that you may still be subject to a 30% CGT tax on any profits if you sell, swap, or spend them later.
Tax On Income From Consultancy Services
Income from consultancy in crypto refers to earnings generated by providing expert advice and guidance in the cryptocurrency industry. Crypto consultants offer insights on trading strategies, market analysis, blockchain technology, and regulatory compliance. They often charge fees for their services, contributing to their income in the rapidly evolving crypto space.
If earned in cryptocurrency, consulting income is considered IFOS and is subject to income tax as per the Income Tax Department (ITD). The applicable tax rate depends on the individual’s tax slab. A person can claim any necessary deductions from the same.
Additionally, GST returns must be filed if eligible. Selling tokens later incurs a Capital Gains Tax (CGT) of 30% and a 4% cess on the tax amount. Stay informed about tax obligations in the dynamic crypto landscape to ensure compliance.
Crackdown on P2P Crypto Transactions
In early 2025, several Indian crypto investors received income tax notices for peer-to-peer (P2P) transactions carried out through foreign exchanges like Binance. These trades, often lacking complete KYC details of the counterparty, were flagged as unexplained cash credits under the Income Tax Act, triggering penalties as high as 78% on the entire transaction amount, not just the profits.
Real-World Cases Under Scrutiny
Investors have been penalised even for small gains due to missing documentation. For example, one trader made a profit of ₹1,500 but was asked to pay ₹78,000 in penalties because he couldn’t furnish verified PAN details of the P2P buyer.
How P2P Transactions Are Taxed in India
Profits from P2P crypto trades are subject to a 30% flat tax, along with 1% TDS on transactions above ₹10,000. However, if proper disclosures and KYC are missing, the Income Tax Department may classify the entire amount as undisclosed income and apply block assessment provisions, leading to significantly higher tax liability.
Key Takeaway for Investors
Avoid using non-compliant foreign platforms for P2P trades without full documentation. Maintain clear transaction records and consider using tools like KoinX to stay compliant and avoid scrutiny.
How To Make Your Tax Filing Convenient With KoinX?
We at KoinX offer a comprehensive taxation tool that easily integrates with your preferred exchange(s) and gives you a detailed report about your tax obligations. You can use this report to file your crypto taxes easily.
With its easy-to-navigate UI, simple exchange integration, and various features, our KoinX is on its way to becoming one of India’s fastest-growing crypto taxation platforms.
The feature of importing tax data gives you a slight advantage over other platforms. This is because you can easily forward this information to your tax advisor, who helps you file your taxes.
Which ITR Should I File?
But which ITR form to file? This question needs to be clarified for most crypto tax investors.
If you earn cryptos using crypto staking, mining, as a salary, or trading, you should file an ITR-2. Our detailed guide on how to file an ITR-2 online can help you do so. Moreover, if you are mining, staking or farming crypto on a business level, you must file ITR-3. You can check out our latest guide on how to file an ITR-3 online.
How To File Crypto Tax in India With KoinX?
Let’s now explore how to file crypto taxes in India with KoinX. There are two ways to file crypto taxes in India: self-filing and a chartered accountant’s help.
Step 1: Login To Your KoinX Account
The first step is to register or login to your KoinX account.
Step 2: Integrate Your Accounts
Once logged in, you must integrate all your crypto wallets and exchanges on your profile for KoinX to import its data. We support integrations from over 270 exchanges, wallets, and blockchains
Step3: Generate Tax Report
Once you have integrated all your accounts, you must generate your crypto tax report. Click on Taxes and then press “Generate Tax Report.”
You can download the file in either PDF or Excel format. Your KoinX tax report is ITR-compliant.
Use KoinX’s end-to-end filing assistance; you can purchase our bundle plan, which offers accurate crypto tax reports and a dedicated tax professional for ITR filing.
If you want to self-file your ITR, you can choose our basic payment plans based on the number of transactions you clock in a single financial year.
If you have bought our bundle plans, you don’t have to do anything after generating the tax reports; we will assign your case to one of our expert CAs, and the rest will be taken care of.
Step 4: Log-In To Income Tax Protal
If you want to self-file your ITR, visit income tax portal and login to your account. Click e-file > Income Tax > File Income Tax Return.
Then choose the Assessment Year > Online (as filing mode) > Continue.
Now, select Individual > Continue. Under “I know which ITR Form I need to file,” select “ITR-2” or “ITR-3.”
Step 5: Report Your Capital Gains and Other Income
Click on Select Schedule > Income > Schedule VDA. Use Schedule VDA section from KoinX tax report to fill in each transaction on the profile. If you have other sources of income other than capital gains, click Schedule Income from Other Sources.
Step 6: Verify Your Income Tax Return
Once you are satisfied with all your input click Submit and verify your return. Click Proceed for Verification and enter the OTP received on registered mobile number linked to your Aadhaar Card.
Frequently Asked Questions
Let’s answer some of the frequently asked questions about crypto tax India:
Is GST Applicable To Crypto Transactions In India?
The Indian government’s stance on applying the Goods and Services Tax (GST) to cryptocurrency remains unclear. The existing GST Act needs to address VDAs, leading to ambiguity. Top Indian crypto exchanges actively seek clarification on whether GST should be imposed on crypto assets and who should be responsible for collecting it.
Can ITD Track Your Crypto Transactions?
The ITD utilises KYC data from domestic exchanges and a 1% Tax Deducted at Source (TDS) to monitor individuals’ crypto holdings, enhancing tax compliance efforts. This allows the ITD to request exchange data to track taxpayers’ assets accurately, streamlining the process.
When Do I Report Crypto Taxes To The Income Tax Department?
In India, the financial year runs from April 1st to March 31st. The current financial year, FY 2024-25, spans from April 1st, 2024, to March 31st, 2025. Taxpayers must file for belated returns by July 31st, 2025 (non-audit cases), October 31st, 2025 (audit cases), or December 31st, 2025.
Which Cost Basis Method Is Accepted In India?
Investors face challenges tracking gains and losses across multiple crypto assets, complicating cost-basis calculations. Choosing a cost basis method, such as first in, first out (FIFO) or average cost basis (ACB), influences the determination of assets sold and timing, impacting overall gains and losses. FIFO and average cost are commonly recognised accounting methods for calculating crypto taxes in India.
Can You Offset Your Crypto Losses In India?
Indian investors face a setback as Section 115BBH bars offsetting crypto losses against gains or other income. Additionally, claiming crypto-related expenses is restricted and limited only to the cost of acquisition. This poses challenges for those seeking to mitigate losses and expenses in the crypto market.
