Crypto is gaining momentum in India, not just as an investment but also as a form of income. Whether you’re earning through mining, staking, consulting, or referral rewards, your crypto income could be subject to income tax under Indian law. However, navigating the tax rules can be overwhelming, especially with two tax regimes to choose from.
This article breaks down everything you need to know about income tax on crypto earnings in India. From the types of transactions that attract tax to slab rates, surcharges, and comparisons between the old and new regimes, we cover it all with simplified examples. This guide will help you calculate your tax liability confidently and stay on the right side of the law.
Read More: Ultimate Crypto Tax Guide in India
Key Takeaways
- Earnings from mining (hobby), staking, airdrops, crypto salary, and referral rewards are taxed at your applicable slab rate under Section 56(2) of the Income Tax Act.
- Disposing crypto through selling, swapping, or spending attracts a flat 30% under Section 115BBH.
- The FMV of crypto on the date of receipt is your taxable income for slab-rate transactions, whether it is a salary, staking reward, airdrop, or mining reward.
- Under the new tax regime for FY 2025-26, the basic exemption limit is Rs 4 lakh, with a rebate under Section 87A available up to Rs 7 lakh. However, this rebate does not apply to crypto gains taxed under Section 115BBH.
- High-income earners pay surcharge on top of income tax, under the new regime. The surcharge is capped at 25%, making the maximum effective rate on slab income up to 34.32%, including cess.
- Under Section 194S, 1% TDS applies on VDA transfers exceeding INR 10,000 (or INR 50,000 for specified persons).
- Budget 2026-27 introduced penalties of Rs 200 per day for late VDA statements and Rs 50,000 for incorrect filing, making accurate reporting more critical than ever.
- All crypto income must be reported in the correct ITR form; ITR-2 is for retail crypto investors, while ITR-3 is for business income earners.
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Income Tax on Cryptocurrency Transactions in India
Not every crypto transaction is taxed the same way in India. The transactions below specifically attract income tax at your applicable slab rate, distinct from the flat 30% capital gains tax that applies on disposal.
Transaction Type | Tax Head | ITA Section | Rate |
Crypto Salary | Income from Salaries / Income from Other Sources | Section 56(2) | Slab rate |
Crypto Staking Rewards | Income from Other Sources | Section 56(2) | Slab rate |
Crypto Mining (Hobby) | Income from Other Sources | Section 56(2) | Slab rate |
Crypto Mining (Business) | Profits and Gains of Business or Profession | Section 56(2) | Slab rate |
Airdrops | Income from Other Sources | Section 56(2) | Slab rate |
Referral Rewards | Income from Other Sources | Section 56(2) | Slab rate |
Consultancy / Freelance Income in Crypto | Income from Other Sources / Business Income | Section 56(2) | Slab rate |
DeFi Earnings | Income from Other Sources | Section 56(2) | Slab rate |
Airdrops Resembling Gifts (above INR 50,000) | Income from Other Sources | Section 56(2)(x) | Slab rate |
Read More: How to e-File ITR in India?
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Individual Income Tax Rates for FY 2025-2026
Here’s the tax slab presented in the budget for 2025 for people aged up to 60:
Old Tax Regime | New Tax Regime | ||
Income Tax Slab | Income Tax Rate | Income Tax Slab | Income Tax Rate |
Up to INR 2,50,000 | Nil | Up to INR 4,00,000 | Nil |
INR 2,50,001 – INR 5,00,000 | 5% of the excess of INR 2,50,000 | INR 4,00,001 – INR 8,00,000 | 5% of the excess of INR 4,00,000 |
INR 5,00,001 – INR 10,00,000 | INR 12,500 + 20% of the excess of INR 5,00,000 | INR 8,00,001 – INR 12,00,000 | INR 20,000 + 10% of the excess of INR 8,00,000 |
Above INR 10,00,000 | INR 1,12,500 + 30% of the excess of INR 10,00,000 | INR 12,00,001 – INR 16,00,000 | INR 60,000 + 15% of the excess of INR 12,00,000 |
INR 16,00,001 – INR 20,00,000 | INR 1,20,000 + 20% of the excess of INR 16,00,000 | ||
INR 20,00,001 – INR 24,00,000 | INR 2,00,000 + 25% of the excess of INR 20,00,000 | ||
Above INR 24,00,000 | INR 3,00,000 + 30% of the excess of INR 24,00,000 | ||
Income Tax Slab for Citizens Aged Between 60 and 80 Years
Here’s the tax slab presented in the budget for 2025 for people aged between 60 and 80 years:
Old Tax Regime | New Tax Regime | ||
Income Tax Slab | Income Tax Rate | Income Tax Slab | Income Tax Rate |
Up to INR 3,00,000 | Nil | Up to INR 4,00,000 | Nil |
INR 3,00,001 – INR 5,00,000 | 5% of the excess of INR 3,00,000 | INR 4,00,001 – INR 8,00,000 | 5% of the excess of INR 4,00,000 |
INR 5,00,001 – INR 10,00,000 | INR 10,000 + 20% of the excess of INR 5,00,000 | INR 8,00,001 – INR 12,00,000 | INR 20,000 + 10% of the excess of INR 8,00,000 |
Above INR 10,00,000 | INR 1,10,000 + 30% of the excess of INR 10,00,000 | INR 12,00,001 – INR 16,00,000 | INR 60,000 + 15% of the excess of INR 12,00,000 |
INR 16,00,001 – INR 20,00,000 | INR 1,20,000 + 20% of the excess of INR 16,00,000 | ||
INR 20,00,001 – INR 24,00,000 | INR 2,00,000 + 25% of the excess of INR 20,00,000 | ||
Above INR 24,00,000 | INR 3,00,000 + 30% of the excess of INR 24,00,000 | ||
Income Tax Slab for Citizens Aged Above 80 Years
Here’s the tax slab presented in the budget for 2025 for people aged above 80 years:
Old Tax Regime | New Tax Regime | ||
Income Tax Slab | Income Tax Rate | Income Tax Slab | Income Tax Rate |
Up to INR 5,00,000 | Nil | Up to INR 4,00,000 | Nil |
INR 5,00,001 – INR 10,00,000 | 20% of the excess of INR 5,00,000 | INR 4,00,001 – INR 8,00,000 | 5% of the excess of INR 4,00,000 |
Above INR 10,00,000 | INR 1,00,000 + 30% of the excess of INR 10,00,000 | INR 8,00,001 – INR 12,00,000 | INR 20,000 + 10% of the excess of INR 8,00,000 |
INR 12,00,001 – INR 16,00,000 | INR 60,000 + 15% of the excess of INR 12,00,000 | ||
INR 16,00,001 – INR 20,00,000 | INR 1,20,000 + 20% of the excess of INR 16,00,000 | ||
INR 20,00,001 – INR 24,00,000 | INR 2,00,000 + 25% of the excess of INR 20,00,000 | ||
Above INR 24,00,000 | INR 3,00,000 + 30% of the excess of INR 24,00,000 | ||
Read More: Crypto Tax Evasion in India
Rebates on Crypto Income in India
Resident individuals are eligible for a rebate under Section 87A of the Income Tax Act, 1961. You can get a rebate of up to 100% of your income tax, subject to a maximum limit depending on the tax regime you choose.
- Under the New Tax Regime, a rebate of up to INR 60,000 is available, provided the taxable income does not exceed INR 12,00,000.
- Under the Old Tax Regime, a rebate of up to INR 12,500 is available, provided the taxable income does not exceed INR 5,00,000.
Important Note: The rebate under Section 87A is available only on income taxed at slab rates. It does not apply to crypto gains taxed at a flat 30% under Section 115BBH. This means even if your total income is within INR 7 lakh, you cannot use the 87A rebate to offset your tax liability on VDA transfers. The 30% tax on crypto gains remains payable in full. |
Read More: How TDS Works on Cryptocurrency in India?
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Surcharges on Crypto Income in India
Surcharge is an additional tax levied on individuals with high incomes. In cryptocurrency earnings, whether from trading, salary, or consultancy, if your total taxable income crosses specific thresholds, a surcharge is applied over and above your base income tax.
Surcharge Rates for Individuals (FY 2025-26)
|
Total Income Range |
Applicable Surcharge Rate |
|
Above INR 50 lakh and up to INR 1 crore |
10% of income tax |
|
Above INR 1 crore and up to INR 2 crore |
15% of income tax |
|
Above INR 2 crore and up to INR 5 crore |
25% of income tax |
|
Above INR 5 crore |
25% of income tax (capped)* |
|
Note: Under the new tax regime, the maximum surcharge has been reduced to 25% from the previous 37%, making it more favourable for high earners. |
Key Points to Remember:
- The surcharge is applied after calculating your income tax based on the applicable slab.
- For crypto gains, the surcharge is imposed on the total tax payable, not on the income itself.
- A 4% Health and Education Cess is also added on top of both tax and surcharge.
For capital gains on VDAs, the maximum surcharge is restricted to 15%, even under the old regime.
Comparative Analysis of New vs. Old Tax Regime for Crypto Income
To better understand how crypto income is taxed under India’s two tax regimes, let’s consider the case of Ravi, a full-time blockchain developer who receives his entire salary in cryptocurrency. For FY 2025-26, Ravi’s gross crypto salary amounts to INR 10,00,000.
Under the old regime, Ravi is eligible to claim the following deductions:
- House Rent Allowance (HRA): INR 1,60,000
- Leave Travel Allowance (LTA): INR 30,000
- Children’s Education Allowance: INR 9,600
- Professional Tax: INR 2,400
- Standard Deduction: INR 50,000
- Section 80C (ELSS & PPF): INR 60,000
- Section 80D (Medical Insurance Premium): INR 50,000
- Section 80E (Education Loan Interest): INR 55,000
The new tax regime, however, does not allow most of these deductions, except for a standard deduction of INR 75,000.
Let’s compare Ravi’s final tax liability under both regimes:
Particulars | New Regime (INR) | Old Regime (INR) |
Gross Crypto Salary | 10,00,000 | 10,00,000 |
HRA Deduction | Not Applicable | 1,60,000 |
Leave Travel Allowance (LTA) | Not Applicable | 30,000 |
Children Education Allowance | Not Applicable | 9,600 |
Professional Tax | Not Applicable | 2,400 |
Standard Deduction | 75,000 | 50,000 |
Taxable Salary Before 80C/80D/80E | 9,25,000 | 7,48,000 |
Section 80C Deduction | Not Applicable | 60,000 |
Section 80D (Medical Insurance) | Not Applicable | 50,000 |
Section 80E (Education Loan) | Not Applicable | 55,000 |
Net Taxable Income | 9,25,000 | 5,83,000 |
Tax Payable (incl. 4% cess) | 44,200 | 30,264 |
Key Points to Remember
- Ravi’s gross salary remains the same under both regimes, but deductions significantly reduce his tax burden under the old system.
- He saves INR 13,936 in taxes by opting for the old tax regime in this case.
- The new regime is beneficial only when deductions are minimal or not applicable.
- For salaried crypto earners like Ravi, understanding which deductions are allowed is key to selecting the most tax-efficient regime.
How To Report Crypto Income in India?
Reporting crypto income in India requires you to handle multiple income streams under different tax heads. The most common filing mistake is treating all crypto income as capital gains and reporting everything under Schedule VDA, when in reality, staking rewards, mining income, airdrops, and crypto salaries must first be declared under their respective income heads at slab rates.
Step 1: Compile All Crypto Income Records
Before opening the ITR filing portal, gather a complete record of every crypto income transaction from the financial year. You will need:
- The date and INR value of every crypto income receipt, salary, staking rewards, mining rewards, airdrops, referral bonuses, DeFi earnings
- The FMV of each token on the exact date of receipt
- Sale records for any tokens disposed of during the year, including the sale price and date
- Wallet addresses and transaction hashes for verification purposes
- Exchange statements and platform reports confirming income distributions
Step 2: Classify Your Income Correctly
Crypto income in India falls under two distinct tax treatments, and each must be reported separately:
- Slab-rate income (salary, staking, mining hobby, airdrops, referral rewards, DeFi earnings, freelance) → Income from Other Sources or Business Income
- 30% flat rate (selling, swapping, spending crypto) → Schedule VDA
Step 3: Choose the Correct ITR Form
The right form depends on the nature of your crypto income:
Step 4: Fill the Correct Income Heads and Schedule VDA
Within your chosen ITR form, complete all relevant sections carefully:
- Under Income from Other Sources, enter the total FMV of all slab-rate crypto income received during the financial year, staking rewards, airdrops, referral bonuses, DeFi earnings, calculated in INR at the time of each receipt.
- Under Salaries, declare crypto salary at FMV on the date of receipt if received as employment compensation.
- Under Schedule VDA, enter each disposal event individually, date of acquisition, date of transfer, cost of acquisition, and the resulting gain.
Step 5: Reconcile Your TDS Credits
Cross-check all TDS deducted on your crypto disposals against your Form 26AS and Annual Information Statement (AIS). If you earned income from foreign platforms where TDS was not auto-deducted, ensure you have self-reported correctly. Any discrepancy between your declared income and AIS data may trigger a notice from the Income Tax Department.
Also Read: AIS Crypto Notice Explained
Step 6: Pay Any Remaining Tax and File
After adjusting your TDS credits, settle any outstanding tax liability as self-assessment tax before submitting your return. If your estimated tax liability for the year exceeds Rs 10,000, advance tax instalments are required. Budget 2026-27 has introduced a penalty of Rs 200 per day for late VDA transaction statements and Rs 50,000 for incorrect filing.
Deadline:
The deadline to file crypto taxes in India are as follows:
- ITR-2: July 31st 2026.
- ITR – 3: August 31st 2026.
Managing multiple crypto income streams across wallets, exchanges, and DeFi protocols manually is one of the leading causes of incorrect ITR filings. However, dedicated crypto tax software, like KoinX, is designed to ease-up your crypto tax calculation and filing process across 100+ countries including India. Here is how it can help.
How Can KoinX Help You Calculate and File Crypto Income Tax in India?
Calculating taxes on crypto earnings can seem complex due to the evolving nature of regulations and the variety of income sources involved. From crypto salaries to staking rewards, every transaction must be reported accurately. That’s where KoinX steps in. Here’s how you can simplify the process with the help of KoinX.
Automate Income Categorisation with KoinX
KoinX automatically identifies and classifies your crypto transactions into specific income categories like salary, airdrops, staking rewards, and more. This means you no longer have to manually tag or filter hundreds of transactions, it does it for you.
Get Accurate Tax Calculations in Minutes
Once your crypto wallets and exchange accounts are integrated, KoinX instantly calculates your total income and applicable tax based on the fair market value of each asset on the date of receipt. It considers both income tax and capital gains tax wherever applicable, giving you a clear overview of your total liability.
Generate ITR-Ready Tax Reports
The platform provides downloadable, audit-ready reports that include transaction summaries, category-wise classification, and income breakdowns. These reports are fully compliant with Indian tax regulations and can be directly used for self-filing or shared with your chartered accountant.
Save Time and Stay Compliant
Instead of using spreadsheets or manual tools, it simplifies crypto tax compliance. Whether you’re a salaried crypto earner or a trader with multiple sources of income, the platform ensures that your tax calculations are fast, accurate, and aligned with the Income Tax Department’s guidelines.
Tired of second-guessing your crypto tax liability? With KoinX, you can automate calculations, track crypto income accurately, and generate ITR-ready reports, all in minutes. Get started with KoinX today and join thousands of Indian investors who trust KoinX to simplify their crypto tax journey.
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Conclusion
Whether you earn from staking, mining, referrals, or crypto salaries, each transaction type has its tax implications. With both the new and old tax regimes available, selecting the right one based on your deductions and total income can significantly impact your final tax liability.
Keeping up with evolving tax rules and doing manual calculations can be overwhelming. That’s where KoinX makes a real difference. From automating tax reporting to integrating all your crypto accounts, KoinX ensures you never miss a detail. Join KoinX today and take the stress out of filing your crypto taxes in India.
Frequently Asked Questions
Can I Claim Deductions on Expenses While Earning Crypto as a Hobby?
No, you cannot claim deductions if you earn crypto from activities treated as a hobby, such as small-scale mining or staking. The income is taxed under “Income from Other Sources,” and only business income allows deductions.
Do I Need to Pay Income Tax If I Hold Crypto Without Selling?
No, simply holding or HODLing cryptocurrency is not a taxable event in India. Income tax applies only when you earn crypto or realise gains through the disposal, sale, or conversion of the asset.
Which ITR Form Should I Use for Declaring Crypto Income?
Does Earning Crypto Through Play-to-Earn Platforms Attract Tax?
Yes. Rewards from play-to-earn games are treated as income and taxed as per your slab rate under “Income from Other Sources.” If you later dispose of those tokens, capital gains tax may apply on profits.
