Yes, CoinDCX reports your crypto transactions to the Income Tax Department but the way these transactions are reported can cause confusion during ITR filing. This is because many crypto traders/investors notice a significant gap between their AIS figures and actual crypto gains. It happens because CoinDCX files a trader’s total trade volume, not the net gain.
Moreover, many crypto traders mistake the 1% TDS deducted by CoinDCX as their final tax liability on crypto trades. In reality, it is only an advance tax deducted against your overall crypto tax liability. You still need to report every VDA disposal separately in Schedule VDA, reconcile your actual gain against the AIS figure, and document the difference before submitting.
This article walks you through each step of the process, making it easier for you to understand what needs to be reported and how to stay compliant.
Key Takeaways
- CoinDCX is FIU-registered under PMLA and deducts 1% TDS under Section 194S on every VDA transfer
- CoinDCX files SFT with the ITD covering your combined buy-and-sell volume, not net gain.
- TDS deducted by CoinDCX reduces your tax payable but does not replace the Schedule VDA filing obligation in ITR-2 or ITR-3.
How CoinDCX Reports to the Income Tax Department
CoinDCX reports through three independent channels. The ITD receives your data across all three whether or not you file an ITR.
Reporting Channel | What CoinDCX Files | What the ITD Receives |
Section 194S TDS | Deducts 1% TDS on every qualifying VDA transfer above the annual threshold | TDS credit recorded in Form 26AS and AIS against the seller’s PAN |
SFT Filing | Submits Statement of Financial Transactions covering your combined buy-and-sell volume for a particular financial year | ITD receives total trade volume, not net gain. This is the primary source of AIS inflation for CoinDCX accounts. |
AIS via Project Insight | PAN-linked account data aggregated into the ITD’s AIS portal automatically | ITD cross-references AIS entries against every filed ITR without manual review |
Note: To make sure exchanges stay compliant, Union Budget 2026 introduced stricter reporting rules for crypto exchanges. Under the new rules, exchanges can face a penalty of INR 200 per day for delaying or failing to submit transaction data to the ITD. Additionally, exchanges can face a flat penalty of INR 50,000 for submitting incorrect transaction reports.
How the ITD Tracks Your CoinDCX Transactions
The reporting channels above are what CoinDCX files directly but that’s not it. The ITD also collects data from other sources:
KYC and PAN-Linked Account Data
CoinDCX’s mandatory KYC process permanently links your account to your PAN. This means every SFT filing and TDS deduction is submitted to ITD against that PAN. The ITD’s Project Insight system cross-checks it against your filed ITR automatically.
AIS and Project Insight
AIS (Annual Information Statement) is the ITD’s consolidated record of every financial transaction reported against your PAN. It draws from banks, brokers, mutual funds, and exchanges including CoinDCX. Every entry in your AIS is automatically compared against your filed ITR by Project Insight. A discrepancy above Rs 1 lakh triggers a NUDGE notice under Section 148A, asking you to explain the difference before any assessment order is raised.
Why Your AIS May Overstate Your Crypto Income
Many traders assume the CoinDCX figure reflected in AIS is their taxable profit, but that is rarely the case. In most situations, the number is significantly inflated due to the way their transaction data is reported. Here’s an example to help you understand it better.
A crypto trader named Meera traded actively on CoinDCX in FY 2025-26. Her total buy-and-sell volume across the year was Rs 8,40,000. Her actual net gain, calculated as sale price minus cost of acquisition per disposal, was Rs 28,500.
Detail | Figure |
Total trade volume on CoinDCX, FY 2025-26 (combined buys and sells) | Rs 8,40,000 |
Actual net gain (sale price minus cost of acquisition) | Rs 28,500 |
Figure shown in AIS from CoinDCX SFT filing | Rs 8,40,000 |
Figure Meera entered in Schedule VDA (correct) | Rs 28,500 |
Tax at 30% under Section 115BBH on Rs 28,500 | Rs 8,550 |
4% health and education cess on Rs 8,550 | Rs 342 |
Total tax payable | Rs 8,892 |
AIS vs ITR discrepancy | Rs 8,11,500. This exceeds the Rs 1 lakh Project Insight threshold by more than 8x. |
Outcome | If Meera doesn’t reconcile the discrepancy in her ITR, a Section 148A NUDGE notice will be issued. |
Why Does it Happen?
CoinDCX files your combined buy-and-sell volume with the ITD through SFT (Statement of Financial Transactions). If you bought Rs 4,00,000 worth of Bitcoin and sold it for Rs 4,50,000, your actual gain is Rs 50,000. Your AIS entry reads Rs 8,50,000. The ITD sees the total volume of both sides of that trade, not the net outcome.
How Common is It?
The ratio between AIS figure and actual taxable gain is not fixed. It depends on how actively you trade. A trader who buys and sells the same holding three times in a year generates six times the volume for a single position. Each round trip doubles the SFT-reported figure while the actual gain stays the same.
What’s the Consequence?
If a discrepancy above Rs 1 lakh is detected between AIS and filed ITR it will trigger a NUDGE notice. The notice will ask you to explain the difference before the ITD raises an assessment order.
To fix this you should first calculate your actual gain from your CoinDCX transaction CSV, not from your AIS. Now reconcile that figure against the AIS entry and document the difference before you file.
How to Download Your CoinDCX TDS Certificate and Transaction History
CoinDCX makes both documents available directly inside the app. Your TDS certificate comes as Form 16A, issued quarterly. Your transaction history downloads as a CSV, covering every trade, P2P transfer, and staking event for the financial year.
TDS Certificate (Form 16A)
CoinDCX issues Form 16A within 90 days of each financial quarter closing. It is sent to your registered email with the subject line “CoinDCX – [Financial Quarter] TDS Statement/Certificate.” It is also available to download directly inside the CoinDCX Pro App. You just need to follow these steps:
- Log in to your CoinDCX Pro App.
- Tap on “Profile.”
- Choose “Generate Reports.”
- Click on “TDS Certificate.”
- Choose “FY 2025-26.”
- Download the PDF.
You can also verify TDS credited against your PAN at the ITD’s e-filing portal under Annual Information Statement. The TDS deducted by CoinDCX will appear there regardless of whether the certificate has been emailed.
Transaction History for Schedule VDA
Your transaction history CSV is the source document for calculating actual gains. To download it, follow the steps listed below:
- Log in to the CoinDCX web dashboard.
- Go to the Orders dropdown menu on top-right of the screen.
- Click on “Order History.”
- Set the date range to April 1, 2025 through March 31, 2026.
- Click “Download CSV.”
Import the CSV into KoinX via the CoinDCX integration. KoinX maps every transaction type including trades, P2P transfers, staking income, and futures positions. It then calculates the taxable gain per disposal at 30% under Section 115BBH.
Common Misconceptions About CoinDCX and ITD Reporting
Most CoinDCX users have one or the other misconceptions about CoinDCX’s reporting their crypto trading activity to ITD and one day they receive a Section 148A notice from ITD. It barely makes sense to them because they were unaware and thought they’re compliant. Some of the most common misconceptions that creates this confusion are:
The TDS CoinDCX Deducted Already Covers My Full Tax Obligation.
The Section 143(3) order is not where your scrutiny begins, it is where it ends. Most crypto taxpayers face problems during final assessment because they did not properly respond to an earlier tax notice. Understanding each stage and what the officer is looking for will change how you approach every notice.
The AIS Figure is My Taxable Income
Your AIS reflects CoinDCX’s SFT-reported trade volume, not your net gain. Entering that figure in Schedule VDA overstates your taxable income and results in overpayment. Calculate the actual gain from your transaction CSV first. Minus the sale price from cost of acquisition per disposal. The AIS figure is for reconciliation reference, not a filing input.
My P2P Trades On CoinDCX are Invisible to the ITD
Section 194S applies to P2P VDA transfers above the annual threshold (Rs 10,000). CoinDCX deducts TDS on qualifying P2P transfers and that credit appears in your AIS against your PAN. P2P activity above the threshold is not outside ITD visibility.
Only INR Cash-Out is Taxable
Section 115BBH taxes every VDA disposal. Swapping Bitcoin for USDT, or ETH for BNB, is a disposal of the first asset. Each swap is a taxable event at 30% flat rate plus 4% cess on the gain. The absence of INR in the transaction does not change the tax treatment.
How to Report Your CoinDCX Trades Correctly
You can report your CoinDCX trades in just three steps:
Calculate Your Actual Gains from the CoinDCX CSV
Export your transaction history for April 1, 2025 to March 31, 2026 from CoinDCX. For each VDA disposal, calculate the gain (sale price – cost of acquisition). This figure is what goes into Schedule VDA,, not the AIS number. For crypto-to-crypto swaps, the INR fair market value at the time of the swap is the sale price.
Reconcile Your Calculated Gains Against AIS
Log in to the ITD’s e-filing portal and open your Annual Information Statement. Find the CoinDCX entry. Compare the AIS figure against your calculated gain total. If there is a difference, identify the cause: volume vs proceeds, intra-wallet transfers counted as disposals, or a TDS credit mismatch.
Document the cause and attach a reconciliation note to your return before submitting. This note is what prevents the Project Insight flag from becoming a Section 148A notice. If you have already filed without this step, file a revised return under Section 139(5).
File Schedule VDA in ITR-2 or ITR-3
Report each VDA disposal individually in Schedule VDA. Do not report a lump sum total. Carry the TDS deducted by CoinDCX as a credit in the relevant section. Retail investors use ITR-2 and traders whose crypto activity qualifies as business income use ITR-3.
These three steps sound straightforward in theory but in reality “Step 2” is where most CoinDCX traders lose hours. Pulling every transaction from the CSV, matching the total against an AIS figure that reflects combined buy-and-sell volume, identifying why the numbers differ, and drafting a reconciliation note the ITD will accept.
However, beware that it can take up a lot of time and lead to multiple errors. You can avoid all those frustrations by simply connecting your CoinDCX account to KoinX. It automatically imports your FY 2025-26 transaction history, generates an ITR-ready Schedule VDA report, and an AIS reconciliation summary.
The best part, though? It just takes 2 clicks to integrate your CoinDCX account to KoinX.
Step 1: Just open the CoinDCX mobile app and click on the profile icon.
Step 2: Click on Tax Reports with KoinX
You will be redirected to KoinX, and all your data will be imported effortlessly. After the integration, generating your CoinDCX tax report becomes a cake walk.
Just visit the “Tax Reports” tab in KoinX, select the financial year and region to generate your CoinDCX tax report. Your generated tax report is 100% aligned with crypto tax laws in India and ready for filing.
Conclusion
A Section 143(3) scrutiny notice is not a verdict, it is an examination. The outcome depends entirely on what you produce and when you produce it. Respond within the deadline, address every query with documented evidence, reconcile your Schedule VDA entries against AIS, and the process works the way Mr. KM’s case proves it can, zero additions, zero demand.
The challenge is always the data. Years of transactions across multiple exchanges and wallets, TDS credits to match, AIS figures to reconcile, all of it needs to be accurate before a single word of your response is written. KoinX consolidates every transaction, generates your Schedule VDA and TDS reconciliation reports, and connects you to expert CA support. Sign up on KoinX today before the next deadline.
Frequently Asked Questions
How do I check what CoinDCX has reported about me to the ITD?
Log in to incometax.gov.in and open the Annual Information Statement. The CoinDCX entry shows the total VDA transaction value filed against your PAN for the year under SFT. This is the combined buy-and-sell volume, not your net gain. Compare this figure against your calculated gain before filing Schedule VDA.
Will I receive a tax notice if I traded on CoinDCX but did not file an ITR?
Yes, the risk is material. CoinDCX’s SFT filing appears in your AIS regardless of whether you submit an ITR. Project Insight runs the AIS vs ITR comparison automatically. If your AIS shows VDA activity and no Schedule VDA entry exists in your return, a Section 148A NUDGE notice follows, particularly for total trade volumes above Rs 1 lakh.
Does CoinDCX deduct TDS on every crypto trade?
CoinDCX deducts 1% TDS under Section 194S on VDA transfers above the annual threshold of Rs 10,000 for most users and Rs 50,000 for specified persons. The deduction applies at the point of transfer, not at INR withdrawal. The credit appears in Form 26AS and AIS against your PAN.
What do I do if my AIS shows a different figure than my actual gain?
Do not enter the AIS figure in Schedule VDA. Calculate the actual gain for each disposal from your CoinDCX transaction CSV (sale price – cost of acquisition). File that figure in Schedule VDA. Add a reconciliation note to the return explaining the difference between the AIS volume figure and the Schedule VDA gain figure. This documentation specifically addresses the Section 148A trigger before it fires.
Does CoinDCX report P2P trades to the ITD?
Section 194S applies to P2P VDA transfers that exceed the annual threshold. CoinDCX deducts TDS on qualifying P2P transfers, and that credit appears in AIS against the relevant PAN. The ITD also holds on-chain forensic capability through its NFSU partnership. P2P transactions above the threshold are not outside ITD visibility.
