Yes, WazirX reports your crypto transactions to the Income Tax Department through three channels. First off, Section 194S TDS deducted at source, remitted to the ITD as INR under the deductor name Zanmai Labs Private Limited. Additionally, SFT filed annually covering total trade volume across your account. Finally, AIS aggregation via Project Insight cross-references exchange-reported data against your ITR.
But it only shares your total trade volume, not your profit. So, your AIS ends up showing a figure that looks nothing like your actual gain. And if those two numbers don’t match what you filed, Project Insight will flag above ₹1 lakh automatically before you even realise there is a problem.
Moreover, remember that the TDS deducted by WazirX does not complete your tax obligation. Every VDA disposal must still be reported individually in Schedule VDA of ITR-2 or ITR-3, and the figure you report must reflect your actual gain, not the AIS volume figure. This article covers exactly what WazirX files, why your AIS may be higher than your taxable gain, and the steps you can take to file your ITR correctly.
Key Takeaways
- WazirX (Zanmai Labs Pvt. Ltd.) deducts 1% TDS under Section 194S on every VDA transfer above ₹10,000/year (₹50,000 for specified persons) and remits it to the ITD as INR.
- WazirX files SFT data with the ITD covering total trade volume, not net gain. Active traders will almost always find their AIS figure is significantly higher than their actual profit.
- Your WazirX TDS appears in Form 26AS under the deductor name “Zanmai Labs Private Limited,” not “WazirX.” Many traders miss their own TDS because they search by the wrong entity name. Section 194S TDS is an advance payment only.
- An AIS vs ITR discrepancy above ₹1 lakh can trigger an automated NUDGE notice from the ITD’s Project Insight system before any formal notice is issued.
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How WazirX Reports to the Income Tax Department
WazirX is a custodial Indian exchange registered with India’s Financial Intelligence Unit (FIU-IND) under PMLA (Prevention of Money Laundering Act, 2002). FIU registration is not optional, it is a legal obligation for all virtual asset service providers operating in India. As an FIU-registered entity, transaction data reporting of WazirX is discussed in the following table:
Reporting Channel | What WazirX Files | What the ITD Receives |
Section 194S TDS | 1% TDS deducted on every qualifying VDA transfer, remitted as INR under deductor name Zanmai Labs Private Limited | A quarterly TDS record tied to your PAN — visible in Form 26AS. |
SFT Filing | Files a Statement of Financial Transactions annually covering combined buy-and-sell volume for the financial year | Total trade volume, not net gain. This is the primary source of AIS inflation for WazirX accounts. |
AIS via Project Insight | PAN-linked account data aggregated and cross-referenced automatically | ITD compares all reported data against your filed ITR without manual review. Discrepancies above INR 1 lakh are flagged automatically. |
Note: Under Budget 2026 enhanced reporting norms Section 509(1), exchanges are required to file detailed transaction statements with the ITD. The penalty for non-reporting is ₹200 per day under Section 446.
How Does the ITD Track Your WazirX Transactions?
Most traders assume the ITD only knows what they tell it. The reality is the department has been building a picture of your crypto activity long before you sit down to file. Here is how the ITD tracks your WazirX transactions:
KYC and PAN-Linked Account Data
When you completed your KYC on WazirX, your PAN became the thread connecting every trade, every TDS deduction, and every SFT filing to your tax record. That connection is permanent. The ITD’s systems don’t need you to report your WazirX activity for them to know it exists. Your PAN already ties every transaction on the exchange directly to your tax profile. The moment WazirX files its quarterly TDS or annual SFT, that data is mapped to you.
AIS and Project Insight
Think of your AIS (Annual Information Statement) as the ITD’s version of your financial diary, except it’s written by your bank, your broker, and your crypto exchange, not by you. Every SFT WazirX file and every TDS Zanmai Labs deducts lands in this statement.
Project Insight is the ITD’s AI-based system that then compares what’s in your AIS against what you declared in your ITR. If the gap crosses ₹1 lakh, the system generates a NUDGE notice through the ITD Compliance Portal automatically. No human intervention, no warning, just a notice asking you to explain the difference. That notice arrives well before any formal Section 148A reassessment proceedings begin.
Why Your AIS May Overstate Your WazirX Income
This is the part most WazirX traders don’t find out until they’re staring at a notice. When WazirX files its annual SFT with the ITD, it reports the total consideration paid and credited across your account. In plain terms, that’s every rupee you spent buying crypto and every rupee you received selling it, added together. If you bought ₹20 lakh worth of Bitcoin and sold ₹22 lakh worth across the year, the figure that lands in your AIS isn’t the net gain of ₹2 lakh. It’s ₹42 lakh.
The ITD’s system sees ₹42 lakh against your PAN, while your actual taxable gain under Section 115BBH is ₹2 lakh. That gap is not an error on WazirX’s part, it’s simply how SFT reporting works. The problem is that most traders don’t know this, and when they see the AIS figure, they either panic and report the wrong number or ignore it entirely and file nothing. Both paths lead to the same place. Let’s understand this with an example:
Example: Ali
Ali traded BTC and ETH on WazirX across FY 2025-26. His combined buy and sell turnover for the year was ₹42,00,000. His actual net gain after deducting the cost of acquisition was ₹1,85,000.
Detail | Figure |
Total trade volume on WazirX, FY 2025-26 (combined buys and sells) | INR 42,00,000 |
Actual net gain (sale price minus cost of acquisition) | INR 185,000 |
Figure shown in AIS from WazirX SFT filing | INR 42,00,000 |
Figure Ali entered in Schedule VDA (correct) | INR 185,000 |
Tax at 30% under Section 115BBH on INR 185,000 | INR 55,000 |
4% health and education cess on INR 55,000 | INR 2,220 |
Total tax payable | INR 57,720 |
AIS vs ITR discrepancy | INR 40,15,000. This exceeds the INR 1 lakh Project Insight threshold by more than 40x. |
Outcome | If Ali doesn’t reconcile the discrepancy in his ITR, a Section 148A NUDGE notice will be issued. |
Why Does It Happen?
WazirX is required to file SFT data with the ITD under Rule 114E of the Income Tax Rules. That rule requires exchanges to report the total value of VDA transactions, which is interpreted as gross trade volume, buys and sells combined. There is no mechanism in the SFT framework for WazirX to file your net gain. The exchange reports what the law requires it to report. The gap between that figure and your actual taxable income is something only you can resolve through Schedule VDA.
How Common is It?
This isn’t an edge case. Any WazirX trader who executed more than a handful of trades in a financial year will have an AIS figure that overstates their actual gain. The more actively someone traded, the wider that gap. A trader who executed twenty buy-sell cycles across the year on modest amounts can easily end up with an AIS figure that is ten or twenty times their actual taxable income. The volume vs proceeds problem affects every active user of every Indian custodial exchange, not just WazirX.
What is the Consequence?
An AIS vs ITR discrepancy above ₹1 lakh triggers a NUDGE notice from Project Insight automatically. That notice arrives through the ITD Compliance Portal and asks you to explain the difference. If you ignore it or respond incorrectly, it can escalate to a formal Section 148A reassessment notice, at which point the ITD has the authority to raise a demand and impose penalties.
You can fix it by calculating your actual gain from the WazirX trading report, report that in Schedule VDA, and document the reconciliation. The next section shows you exactly how to get that data from WazirX.
How to Download Your WazirX Transaction History and TDS Certificate
Unlike some Indian exchanges, WazirX does not issue a separate Form 16A. Your TDS record is embedded directly inside the Trading Report under the Exchange Trades section, alongside your full transaction history for the financial year. The steps to download your WazirX trading report are as follows:
Log into your WazirX account.
Go to “Account Settings.”
Click on “Download Reports.”
Select “Trading Report.”
- Check all the types of trades under the Trading Report.
- Enter the timeline.
- Finally, click “Request Trading Report.”
WazirX sends the report to your registered email address, typically within a few minutes. Once you have the report, go to the “Exchange Trades” section. Every trade is listed with the TDS deducted in INR per transaction. This is your TDS record for the year. Cross-reference the total TDS figure against your Form 26AS at tdscpc.gov.in under the deductor name Zanmai Labs Private Limited to confirm what WazirX has already remitted to the ITD on your behalf.
For your transaction history, the same report covers everything you need for Schedule VDA. The “Exchange Trades” section contains your spot trade history, the “P2P Trades” section covers any peer-to-peer transactions, and the “Deposits and Withdrawals” section accounts for on-chain transfers. If you trade across all three, importing the CSV into KoinX is the most reliable way to make sure nothing gets missed when you file.
Common Misconceptions About WazirX and ITD Reporting
Every year, a fresh batch of WazirX traders gets flagged by Project Insight. They weren’t evading tax, they were operating on assumptions that felt reasonable right up until the notice arrived. What they had in common was believing one of these five things:
WazirX Doesn't Share My Trading Data with the ITD
WazirX is FIU-registered and legally required to file SFT data with the ITD every financial year. That filing covers total trade volumes tied to your PAN. There is no discretion involved. Every trade you execute on WazirX creates a data point that flows directly into the ITD’s systems, whether or not you file an ITR.
TDS Deducted by WazirX Means My Tax Obligation is Complete
Section 194S TDS is an advance payment against your eventual tax liability, not a final settlement. Filing Schedule VDA in ITR-2 or ITR-3 is still required. If you miss the filing deadline, then under Section 234F a late fee of up to ₹5,000 is applicable regardless of how much TDS was already deducted.
The AIS Figure is What I Owe Tax On
The AIS figure from WazirX reflects total trade volume, not net gain. Reporting that figure directly in Schedule VDA will almost certainly overstate your income. Your actual taxable amount under Section 115BBH is sale price minus cost of acquisition, calculated per disposal. The AIS figure and your taxable gain are two entirely different numbers.
How to Report Your WazirX Trades Correctly
Knowing what WazirX reports is only half the picture. The other half is making sure what you file matches it, and where it doesn’t, that you can explain why. These three steps cover the entire process:
Calculate Your Actual Gains from the WazirX CSV
For every disposal, which includes a sell, a crypto-to-crypto swap, or a crypto-to-INR trade, calculate sale price minus cost of acquisition. That figure is your taxable gain under Section 115BBH. No deductions other than cost of acquisition are permitted. Losses from one VDA cannot be set off against gains from another or against any other income head.
Reconcile Your Calculated Gain Against Your AIS
Log into the Income Tax e-filing website, then navigate to the “Services” at the top and select “Annual Information Statement (AIS)”. You’ll be redirected to the AIS compliance portal where you have to choose the financial year you need to verify. Now find the entry under Zanmai Labs Private Limited, and note the figure. Compare it with your calculated actual gain. For an active trader, the AIS figure will be higher, sometimes by a significant margin.
Prepare a brief reconciliation note documenting why the two figures differ. The AIS figure represents gross trade volume filed under Rule 114E. Your Schedule VDA figure represents net taxable gain calculated on a disposal-by-disposal basis under Section 115BBH. You do not have to submit this note with your ITR, but it should be kept on record in case the ITD raises a query.
File Schedule VDA in ITR-2 or ITR-3
Report each VDA disposal in Schedule VDA. Claim TDS deducted by Zanmai Labs as credit under Schedule TDS2, using the PAN of Zanmai Labs Private Limited, not WazirX. If your Schedule VDA figure differs from the AIS entry, include a reconciliation note in the filing. This significantly reduces the risk of a Project Insight NUDGE or a formal Section 148A notice. If your ITR has already been filed without WazirX gains, a revised return under Section 139(5) can be filed up to December 31 of the relevant assessment year.
Crypto tax calculations can be overwhelming, especially when matching hundreds of WazirX trades against inflated AIS data. Spreadsheets fail to handle hundreds of WazirX trades or reconcile inflated AIS data. Connect your WazirX account to KoinX to automate your gain calculations, resolve AIS mismatches, track TDS, and download your ITR-ready report all in one place.
To integrate your WazirX account to KoinX, follow the steps below:
- Step 1: Log in to your KoinX account.
- Step 2: Click on the “Integrations” icon at the bottom left. Click on “Add Integration” and select “WazirX.”
- Step 3: Upload your CSV file (the one you downloaded from WazirX) and hit the Submit button.
Your WazirX account will be connected. So, sit back and relax while KoinX handles all your crypto tax headaches.
Conclusion
Between Section 194S TDS, annual SFT filing, and AIS aggregation, WazirX gives the ITD a detailed view of your trading activity. Their automated systems match that data against your ITR without any delay. A discrepancy of ₹1 lakh is sufficient to trigger a NUDGE notice. For most active traders, that threshold is easier to cross than it looks.
The good news is that the fix is straightforward. Download your WazirX trading report, calculate your actual gain on a disposal-by-disposal basis, check the Zanmai Labs entry in your AIS, and file Schedule VDA with a reconciliation note before the July 31 ITR deadline. The process has three steps and the data you need is already inside your WazirX account. The only thing that makes it complicated is doing it manually across hundreds of trades.
That is exactly where KoinX comes in. Once you connect your WazirX account, it pulls every transaction type, reconciles your TDS credits, and produces an ITR-ready report you can hand to your CA or upload directly.
Frequently Asked Questions
How do I check what WazirX has reported about me to the ITD?
Log into the AIS portal at incometax.gov.in and look for the entry under Zanmai Labs Private Limited. This shows the total trade volume WazirX has reported against your PAN for the financial year. You can also check Form 26AS at tdscpc.gov.in under the same deductor name for your TDS record specifically.
Will I get a notice if I traded on WazirX but did not file an ITR?
Most likely, yes. The ITD’s Project Insight system cross-references every SFT and TDS filing against ITR data automatically. If WazirX has filed SFT data or deducted TDS against your PAN and no ITR exists for that year, the discrepancy is immediate and almost certainly above the ₹1 lakh NUDGE threshold. File a belated return as soon as possible under Section 139(4) and pay any applicable interest and late fees.
Why does my AIS show a much higher figure than my actual crypto gain from WazirX?
Because WazirX files your total trade volume with the ITD, not your net gain. The SFT filing covers every buy and sell transaction across your account, combined. Your actual taxable amount under Section 115BBH is sale price minus cost of acquisition, calculated per disposal. Those two figures will almost never match, and the gap between them is not an error. It is simply how SFT reporting works under Rule 114E.
Does WazirX deduct TDS on all crypto trades?
No, not on all trades. WazirX deducts 1% TDS under Section 194S on sales in the INR market and on both sides of crypto-to-crypto trades. TDS is not deducted when you buy in the INR market, and it does not apply to crypto withdrawals or transfers. The threshold is ₹10,000 per year for most users and ₹50,000 per year for specified persons. If you have not filed an ITR in the last two years and TDS in each of those years was ₹50,000 or more, a higher TDS rate applies.
What happens if my WazirX TDS does not appear in my Form 26AS?
WazirX TDS data takes up to 45 to 60 days after the end of each financial quarter to appear in Form 26AS. If TDS is present in your WazirX trading report but missing from Form 26AS, wait for the next quarterly update before filing. If the filing deadline is approaching, include a reconciliation note in your ITR and follow up with WazirX support if the entry does not appear after the expected window.
I already filed my ITR without including my WazirX gains. What do I do now?
File a revised return under Section 139(5). Following recent extensions, you have until March 31 of the relevant assessment year to do this with no penalty. If that window closes, you can still file an updated return (ITR-U) under Section 139(8A) for up to four years. However, ITR-U attracts an additional penalty tax ranging from 25% to 70% depending on how late you file, so it’s always best to revise early.
