Yes, Mudrex reports your VDA transactions to the Income Tax Department (ITD). Through this automated reporting, the ITD doesn’t need to wait for you to disclose your Mudrex trades. Every transaction you placed on the platform already exists as a confirmed entry in a government database linked to your PAN, and what the ITD has on record against you is almost certainly not what you think it is.
Mudrex files a Statement of Financial Transactions (SFT) covering your combined VDA trade volume with the ITD each financial year. It also deposits your TDS credit against your PAN under Section 194S, and both pieces of data feed directly into your Annual Information Statement (AIS).
The figure you will find there is not your taxable profit from Mudrex trading. It reflects your total transaction volume, which in most cases is larger than the actual net gain, and that gap between the two numbers is precisely what the ITD’s automated systems are designed to flag.
Since bridging that gap is your responsibility, download your Mudrex transaction statement, calculate the gain on each VDA disposal at the flat rate under Section Section 115BBH, and file Schedule VDA in your ITR while utilizing the portal’s online feedback mechanism to reconcile the data variance.
Key Takeaways
- Mudrex is FIU-registered under PMLA and deducts 1% TDS under Section 194S on every qualifying INR Spot VDA sell transaction.
- Mudrex files SFT with the ITD covering your combined VDA transaction volume, not your net gain. TDS deducted by Mudrex reduces your tax payable but does not replace the Schedule VDA filing obligation in ITR-2 or ITR-3.
- The transaction figure in your AIS reflects total transfer values, not net gains. A significant mismatch between your AIS data and your Schedule VDA entry will trigger an automated inconsistency flag or a Section 148(A) intimation adjustment from the ITD’s compliance systems.
- Mudrex Coinsets investors face an additional reporting consideration. No TDS is deducted on Coinset rebalancing events, and each rebalancing cycle that results in a gain must still be accounted for when filing Schedule VDA.
- Under Section 509(1), crypto exchanges are obliged to submit transaction data with the Income Tax Department and not doing so is penalized under Section 446. For delayed reporting a penalty of INR 200 per day is applied whereas reporting incorrect or inaccurate data, leads to a flat penalty of INR 50,000.
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How Mudrex Reports to the Income Tax Department
Mudrex reports through three independent channels. The ITD receives your data across all three whether or not you file an ITR.
Reporting Channel | What Mudrex Files | What the ITD Receives |
Section 194S TDS | Deducts 1% TDS on every qualifying INR Spot VDA sell transaction above the annual threshold. | TDS credit recorded in Form 26AS and AIS against the seller’s PAN. |
Crypto SFT / Section 509(1) Return | Submits a specialized transaction statement covering your combined crypto transfer values for the financial year. | ITD receives total transaction volume, not net gain. This is the primary source of AIS data inflation for Mudrex 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: The dedicated VDA reporting architecture under Section 509(1) carries strict reporting obligations for crypto exchanges. Under Section 446, exchanges face a penalty of INR 200 per day for delayed submissions and a flat INR 50,000 for filing incorrect transaction data with the ITD. Mudrex’s compliance incentive to report your data accurately and on time has never been stronger.
How the ITD Tracks Your Mudrex Transactions
The three reporting channels above cover what Mudrex files directly. The ITD also pulls your data from additional sources that most traders are unaware of. This includes:
KYC and PAN-Linked Account Data
Mudrex’s mandatory KYC process permanently links your account to your PAN before you place a single trade. Every SFT filing and TDS deduction Mudrex submits to the ITD is recorded against that PAN. The ITD’s Project Insight system then cross-checks that data against your filed ITR automatically, without any manual intervention required.
AIS and Project Insight
AIS is the ITD’s consolidated record of every financial transaction reported against your PAN across banks, brokers, mutual funds, and exchanges including Mudrex. Project Insight runs an automated comparison between every AIS entry and your filed ITR.
A clear discrepancy between the Mudrex transaction figure in your AIS and the gain you reported in Schedule VDA triggers an automated electronic inconsistency flag on the Compliance Portal, asking you to explain the difference online before your return can be processed normally.
Why Your AIS May Overstate Your Mudrex Crypto Income
Many Mudrex traders assume the figure in their AIS represents their taxable profit. In most cases, it is significantly higher than that, and the difference is not an error. It is a direct result of how Mudrex is required to report your transactions to the ITD.
Consider a trader named Kartik who traded actively on Mudrex in FY 2025-26. His total buy-and-sell volume across the year was INR 7,20,000. His actual net gain, calculated as sale price minus cost of acquisition was INR 24,000.
Detail | Figure |
Total trade volume on Mudrex, FY 2025-26 (combined buys and sells) | INR 7,20,000 |
Actual net gain (sale price minus cost of acquisition) | INR 24,000 |
Figure shown in AIS from Mudrex SFT filing | INR 7,20,000 |
Figure Rohan entered in Schedule VDA (correct) | INR 24,000 |
Tax at 30% under Section 115BBH on INR 24,000 | INR 7,200 |
4% health and education cess on INR 7,200 | INR 288 |
Total tax payable | INR 7,488 |
AIS vs ITR discrepancy | INR 6,96,000. This wide gap represents the volume of unmapped trade data. |
Outcome | If Rohan doesn’t submit online AIS feedback or properly account for it, the ITD will flag the return as inconsistent under Section 148(A). |
Why Does It Happen?
Mudrex files your combined buy-and-sell volume with the ITD through SFT. If you bought INR 3,50,000 worth of Ethereum and sold it for INR 3,85,000, your actual gain is INR 35,000. However, your AIS entry reads INR 7,35,000. The ITD sees the total volume of both sides of that trade, not the net outcome.
How Common is It?
The ratio between the AIS figure and your actual taxable gain is not fixed. It depends entirely on how actively you traded during the year. A trader who buys and sells the same holding three times generates six times the volume for a single position. Each round trip doubles the SFT-reported figure while the actual gain remains unchanged.
What is the Consequence?
A clear discrepancy between your AIS transaction figure and your filed Schedule VDA entry will trigger an automated online inconsistency notification. The ITD will ask you to explain or accept the data variance on the e-filing compliance portal. To address this proactively, calculate your actual gain from your Mudrex statement, file the correct figures, and utilize the online AIS feedback feature to mark the reported SFT amount as a gross volume mismatch.
How to Download Your Mudrex Transaction Statement and Verify Your TDS
You will need your Mudrex Transaction Statement before filing your ITR return. This is because it covers every spot trade, futures position, and Coinset redemption for the financial year, with a clear record of what you traded, what was deducted, and what you ultimately received. This is the document your CA will use to calculate your Schedule VDA gains.
So, to download it, follow these steps:
- Log in to your Mudrex account on the mobile app.
- Tap your “profile icon” in the upper left section of the screen.
- Scroll down and tap “Transaction Statement” under “Reports and Statements”.
- Select the relevant financial year.
- Tap “Request Statement”.
Mudrex will send the statement to your registered email address. Once you have the statement, the TDS deducted on each INR Spot sell is already listed inside it at the transaction level. Add up the total TDS column and cross-check that figure against the TDS credit recorded against your PAN in your Annual Information Statement at the ITD portal.
If both figures match, you are ready to carry that credit forward in your ITR. If they do not match, contact Mudrex support before the filing deadline.
Common Misconceptions About Mudrex and ITD Reporting
There is a consistent pattern among Mudrex traders who end up with an unexpected tax liability. They did not ignore their obligations; they misunderstood where the trading app’s responsibility ends and theirs begins. The misconceptions below are the most common points of that confusion, and each one has a direct consequence on what you owe and whether your ITR holds up to scrutiny:
The TDS Mudrex Deducted Already Covers My Full Tax Obligation
Section 194S TDS is an advance payment toward your total tax liability, not a settlement. Filing Schedule VDA in ITR-2 or ITR-3 is a separate, mandatory obligation for every VDA disposal in the financial year. Miss the filing deadline and Section 234F adds a late fee of INR 5,000. Section 234A interest then accrues on any outstanding tax at 1% per month from the due date.
The AIS Figure is My Taxable Income
Your AIS reflects Mudrex’s SFT-reported trade volume, not your net gain. Entering that figure in Schedule VDA overstates your taxable income and results in overpayment. Calculate your actual gain from your Mudrex Transaction Statement first, using sale price minus cost of acquisition per disposal. The AIS figure is a reconciliation reference, not a filing input.
Coinset Rebalancing is Not a Taxable Event as No TDS was Deducted
Mudrex does not deduct TDS on Coinset rebalancing events, but the absence of a deduction does not make those events tax-exempt. Every rebalancing cycle that results in a gain is taxable under Section 115BBH at 30% plus 4% cess, and the ITD expects those gains in your Schedule VDA. If you invested in Coinsets this year and assumed rebalancing was outside your tax scope, review your Transaction Statement before filing.
My Futures Trades on Mudrex are Not Reported to the ITD
Mudrex’s SFT filing covers your overall VDA transaction activity on the platform. Your KYC and PAN linkage means every account activity is tied to your tax record regardless of the product you used. Futures positions that result in a gain are taxable under Section 115BBH at 30%, and the ITD has visibility into your Mudrex account activity whether or not TDS was deducted on those transactions.
Only INR Cash-Out is Taxable
Section 115BBH taxes every VDA disposal, not just withdrawals to your bank account. Swapping Bitcoin for USDT on Mudrex is a disposal of Bitcoin. Each swap is a taxable event at the 30% flat rate plus 4% cess on the gain, regardless of whether INR ever changed hands.
How to Report Your Mudrex Trades Correctly
Reporting your Mudrex trades correctly comes down to the following three steps:
Calculate Your Actual Gains from the Mudrex Transaction Statement
Download your Transaction Statement for FY 2025-26 from the Mudrex app following the steps in the previous section. For each VDA disposal, calculate the gain as sale price minus cost of acquisition. This figure is what goes into Schedule VDA, not the AIS number. For crypto-to-crypto swaps, use the INR fair market value at the time of the swap as the sale price.
Reconcile Your Calculated Gains Against Your AIS
Log in to the ITD e-filing portal and navigate to your Annual Information Statement. Locate the Mudrex entry and compare the AIS figure against your calculated gain total. If there is a variance, utilize the portal’s built-in “AIS Feedback” form to clarify that the number is a transaction volume mismatch. Keep an internal reconciliation spreadsheet ready in your files. This documentation is what allows you to clear an automated system flag instantly if a compliance query arises later.
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 Mudrex as a credit in the relevant TDS section of your ITR. Retail investors with no business income use ITR-2. Traders whose crypto activity qualifies as business income use ITR-3.
The process sounds straightforward in theory but in practice it is a different story. Many Mudrex traders lose hours matching statements with AIS volumes, finding why numbers mismatch, and drafting a reconciliation note the tax department will accept. All of this can be done in minutes instead of hours by direct integration of your Mudrex account with KoinX in five simple steps:
Step 1: Log in to your KoinX account.
Step 2: Click on the “Integration” tab in the sidebar.
Step 3: Click on the “Mudrex exchange” icon under the “Add Integration” tab.
Step 4: Under “Direct Connect,” click on the “Connect Mudrex” button. You will be redirected to the Mudrex website.
Step 5: Click on “Accept.”
Your secure and seamless integration with KoinX is completed and your every crypto taxation concern will be handled by KoinX automatically.
Conclusion
Mudrex reports your VDA transactions to the ITD through independent channels, and that data sits in the department’s systems. If the system detects a significant discrepancy between the Mudrex transaction figure in your AIS and the net gain you report in Schedule VDA, it triggers automated system flags. It happens even when your gain calculation is entirely correct. The cost of leaving that gap unaddressed is always higher than resolving it via online portal feedback before the system flags it.
So, before filing your ITR, download your Mudrex Transaction Statement, calculate your actual gains per disposal, check the AIS entry at the ITD portal, and submit the necessary online feedback to clarify the transaction volume. The process might sound straightforward at first but the execution can be daunting. KoinX is built for exactly this. Connect your Mudrex account and let KoinX handle the gain calculations, the AIS reconciliation, and the Schedule VDA report in one place.
Frequently Asked Questions
How do I check what Mudrex has reported about me to the ITD?
Log in to incometax.gov.in and open your Annual Information Statement. The Mudrex entry shows the total VDA transaction value filed against your PAN for the year under SFT. This is your combined buy-and-sell volume, not your net gain. Compare this figure against your calculated gain from your Transaction Statement before filing Schedule VDA.
Will I receive a tax notice if I traded on Mudrex but did not file an ITR?
Yes, Mudrex’s data reporting appears in your AIS regardless of whether you submit an ITR. Project Insight runs an automated comparison between every AIS entry and your filed returns. If your AIS shows active VDA transactions and no Schedule VDA entry exists in your return, an automated compliance portal reminder or an inconsistency flag under Section 148(A) will follow.
Does Mudrex deduct TDS on every crypto transaction?
No. Mudrex deducts 1% TDS under Section 194S on INR Spot sell transactions and USDT to INR conversions above the annual threshold. No TDS is deducted on buy transactions, futures trades, Coinset investments, Coinset redemptions, or Coinset rebalancing events. The absence of TDS on these transaction types does not affect their taxability under Section 115BBH.
What do I do if my AIS shows a different figure than my actual gain?
Do not enter the raw AIS volume figure in Schedule VDA. Calculate your actual gain for each disposal from your Mudrex Transaction Statement using sale price minus cost of acquisition. File that correct figure in Schedule VDA and log in to the e-filing portal to submit “AIS Feedback,” selecting the appropriate option to clarify that the reported exchange figure represents total transaction value rather than taxable income.
Are Coinset rebalancing gains taxable even if Mudrex did not deduct TDS?
Yes. Every rebalancing event that results in a VDA disposal at a gain is taxable under Section 115BBH at 30% plus 4% cess. Mudrex does not deduct TDS on rebalancing events, but that does not change the underlying tax treatment. You are required to account for those gains individually in Schedule VDA when filing your ITR.
What happens if I already filed my ITR without reconciling my Mudrex AIS figure?
File a revised return under Section 139(5) before the ITD raises a notice. A revised return filed proactively carries significantly lower risk than responding to a formal assessment. Include a reconciliation note explaining the difference between the AIS figure and your Schedule VDA entry when you refile.
Can I carry forward a loss from my Mudrex trades to offset gains next year?
No. Section 115BBH does not permit VDA losses to be set off against any other income or carried forward to subsequent assessment years. Each disposal is assessed independently at the 30% flat rate on any gain. A loss on one VDA disposal cannot reduce the tax on a gain from another.
