Quick answer
VDA is India's official term for crypto - and it comes with a 30% flat tax, 1% TDS, and no loss offsets.
Regulations
India
VDA — Virtual Digital Asset
India's legal term for cryptocurrency as defined in the Finance Act 2022; subject to 30% flat tax under Section 115BBH.
IndiaUnderstanding VDA — Virtual Digital Asset on crypto
Virtual Digital Asset is the term introduced by the Finance Act 2022 to define cryptocurrency and NFTs within India's income tax framework. The definition under Section 2(47A) is broad, covering any code, number, or token with cryptographic security that can be transferred electronically. VDAs are subject to 30% flat tax under Section 115BBH, 1% TDS on qualifying transfers under Section 194S, and Schedule VDA reporting in the ITR.
Virtual Digital Asset is the term introduced by the Finance Act 2022 to define cryptocurrency and NFTs within India's income tax framework. The definition under Section 2(47A) is broad, covering any code, number, or token with cryptographic security that can be transferred electronically. VDAs are subject to 30% flat tax under Section 115BBH, 1% TDS on qualifying transfers under Section 194S, and Schedule VDA reporting in the ITR.
What this means for your crypto activity
Broad VDA definition
All cryptocurrency, NFTs, and qualifying digital assets in India are VDAs.
30% flat tax
30% flat tax on all VDA transfers with no deductions except cost of acquisition.
1% TDS
1% TDS on qualifying transfers above threshold.
No loss offsets
VDA losses cannot offset gains from other VDAs or other income.
Gift tax rules
Gifts of VDAs above Rs 50,000 from non-relatives are taxable for the recipient.
- All cryptocurrency, NFTs, and qualifying digital assets in India are VDAs.
- 30% flat tax on all VDA transfers with no deductions except cost of acquisition.
- 1% TDS on qualifying transfers above threshold.
- VDA losses cannot offset gains from other VDAs or other income.
- Gifts of VDAs above Rs 50,000 from non-relatives are taxable for the recipient.
Seeing it in action
Example scenario
Priya sells ETH for Rs 3,00,000 having bought it for Rs 1,50,000. Her gain is Rs 1,50,000. Tax at 30% = Rs 45,000 plus 4% cess = Rs 46,800. Gas fees are not deductible. The exchange deducts 1% TDS of Rs 3,000 at source before crediting proceeds.
How this works across jurisdictions
- India
VDA defined under Section 2(47A); 30% flat tax under Section 115BBH; 1% TDS under Section 194S; Schedule VDA required in ITR; VDA losses not offsettable.
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