Quick answer
India's flat 30% tax on all crypto income — no deductions, no loss offsets, no exemptions except your original purchase cost.
Income Tax
India
Section 115BBH
Indian income tax provision taxing VDA income at a flat 30% with no deductions permitted except cost of acquisition.
IndiaUnderstanding Section 115BBH on crypto
Section 115BBH of the Income Tax Act, introduced via the Finance Act 2022, governs the taxation of Virtual Digital Assets (VDAs) in India. It imposes a flat tax rate of 30% (plus applicable surcharge and cess) on income arising from the transfer of VDAs. The only deduction permitted is the cost of acquisition — no expenses, no mining costs, no platform fees, and no losses from other VDA transactions can be offset. Losses from one VDA cannot be set off against gains from another, and VDA losses cannot be carried forward to future years.
Section 115BBH of the Income Tax Act, introduced via the Finance Act 2022, governs the taxation of Virtual Digital Assets (VDAs) in India. It imposes a flat tax rate of 30% (plus applicable surcharge and cess) on income arising from the transfer of VDAs. The only deduction permitted is the cost of acquisition — no expenses, no mining costs, no platform fees, and no losses from other VDA transactions can be offset. Losses from one VDA cannot be set off against gains from another, and VDA losses cannot be carried forward to future years.
What this means for your crypto activity
Flat 30% rate
All VDA gains are taxed at 30% flat regardless of holding period or income bracket.
Cost of acquisition only
The only allowable deduction is the original purchase price of the VDA sold.
No loss offsets
Losses from crypto cannot offset gains from any other source — including other cryptocurrencies.
1% TDS under Section 194S
Section 194S requires 1% TDS on VDA transfers above threshold values.
Gift tax for recipients
Gifts of VDAs are taxable in the hands of the recipient under 'Income from Other Sources' provisions.
- All VDA gains are taxed at 30% flat regardless of holding period or income bracket.
- The only allowable deduction is the original purchase price of the VDA sold.
- Losses from crypto cannot offset gains from any other source — including other cryptocurrencies.
- Section 194S requires 1% TDS on VDA transfers above threshold values.
- Gifts of VDAs are taxable in the hands of the recipient under 'Income from Other Sources' provisions.
Seeing it in action
Example scenario
Ravi buys 1 ETH for ₹1,50,000 and sells it for ₹2,50,000. His gain is ₹1,00,000. Tax at 30% = ₹30,000, plus 4% health and education cess = ₹31,200. He also paid ₹500 in platform fees — but those are not deductible under Section 115BBH. Separately, he has a ₹20,000 loss in DOGE — this cannot offset his ETH gain.
How this works across jurisdictions
- India
IN: Section 115BBH levies a flat 30% tax plus surcharge and a 4% health and education cess on all VDA transfers, permitting only the original cost of acquisition as a valid deduction while completely banning intra-asset loss set-offs and forward carry-overs.
From the KoinX blog
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