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.
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Income Tax on Cryptocurrency Transactions in India
Not every crypto transaction is taxed the same. In India, certain types of crypto earnings fall under “Income from Other Sources” and are taxed according to your applicable slab rate. Below is a breakdown of each crypto income stream that attracts income tax:
Crypto Salary
If you’re paid in crypto for work or services, the fair market value (FMV) of the tokens on the date of receipt is considered income. It’s taxed under the income tax slab applicable to you. This applies whether the crypto is transferred to your wallet or held on an exchange.
Read More: How to e-File ITR in India?
Crypto Staking Rewards
Staking rewards are treated as income when received. The FMV of the tokens at the time of credit is added to your annual income and taxed under the slab rate. These tokens are also subject to capital gains tax if sold later at a profit.
Crypto Mining (As a Hobby)
If you mine crypto casually and not as a registered business, the rewards are classified under “Income from Other Sources.” The FMV of the mined coins on the date of receipt is taxed based on your slab, and no expense deductions are allowed.
Consultancy Income Paid in Crypto
When you offer advisory or freelance services and get paid in crypto, the FMV of the received tokens becomes taxable income. This is reported under “Income from Other Sources” unless you operate as a registered business entity.
Referral Rewards
Referral bonuses received in crypto are taxed as income on the day of receipt. The FMV of the tokens is added to your total annual income and taxed based on your applicable slab rate. These earnings are also subject to capital gains tax when sold.
Income From Token Sales
Participating in ICOs or IDOs and receiving tokens in return is considered income. The FMV of the received tokens is taxable under your slab. If you purchase ICO tokens using crypto, any profit made on the initial crypto is subject to a flat 30% capital gains tax.
DeFi Earnings
Tokens earned via DeFi platforms, through liquidity mining, governance rewards, or play-to-earn games, are taxable when received. Their FMV must be added to your annual income and taxed at your slab rate, even if they are not sold right away.
Airdrops (When Considered Gifts)
If airdropped tokens are received without conditions and resemble gifts, they are considered income if their total value exceeds INR 50,000 in a financial year. The FMV of all qualifying gifts is added to your income and taxed according to your slab rate.
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Income Tax Slab Rates for FY 2024–25 (AY 2025–26)
Your crypto income, whether from salary, mining, staking, or airdrops, is taxed as per your income slab unless it qualifies as capital gains. The applicable tax rate depends on whether you choose the new or old tax regime.
New Tax Regime Slabs (Default Regime)
Under the new system, all individuals are taxed equally, and there are no separate slabs for senior citizens. Here’s how the slabs are structured for FY 2024–25:
|
Income Range |
Tax Rate |
|
Up to INR 3,00,000 |
Nil |
|
INR 3,00,001 – INR 7,00,000 |
5% |
|
INR 7,00,001 – INR 10,00,000 |
10% |
|
INR 10,00,001 – INR 12,00,000 |
15% |
|
INR 12,00,001 – INR 15,00,000 |
20% |
|
Above INR 15,00,000 |
30% |
Important Points for Individuals Filing Under the New Regime
- Same slabs for all age groups
- Rebate of up to INR 25,000 available if income is within INR 7 lakh
- INR 75,000 standard deduction for salaried individuals
- Employer NPS contribution is deductible up to 14%
- The highest surcharge is capped at 25%
Read More: Crypto Tax Evasion in India
Old Tax Regime Slabs (For People Wanting Deductions)
The old regime provides more flexibility with deductions and exemptions. The rates differ based on the taxpayer’s age group.
For Individual Age Up to 60 Years:
|
Income Range |
Rates |
|
Up to Rs. 3,00,000 |
NIL |
|
Rs. 300,000 to Rs. 6,00,000 |
5% on income which exceeds Rs 3,00,000 |
|
Rs. 6,00,000 to Rs. 900,000 |
Rs 15,000 + 10% on income more than Rs 6,00,000 |
|
Rs. 9,00,000 to Rs. 12,00,000 |
Rs 45,000 + 15% on income more than Rs 9,00,000 |
|
Rs. 12,00,000 to Rs. 1500,000 |
Rs 90,000 + 20% on income more than Rs 12,00,000 |
|
Above Rs. 15,00,000 |
Rs 150,000 + 30% on income more than Rs 15,00,000 |
For Senior Citizens (60 to 80 Years):
|
Income Range |
Tax Rate |
|
Up to INR 3,00,000 |
Nil |
|
INR 3,00,001 – INR 5,00,000 |
5% |
|
INR 5,00,001 – INR 10,00,000 |
20% |
|
Above INR 10,00,000 |
30% |
For Super Senior Citizens (Above 80 Years):
|
Income Range |
Tax Rate |
|
Up to INR 5,00,000 |
Nil |
|
INR 5,00,001 – INR 10,00,000 |
20% |
|
Above INR 10,00,000 |
30% |
Important Points for Individuals Filing Under the New Regime
- Surcharge and cess are also applicable.
- If your net taxable income is INR 5 lakh or less, you can claim a tax rebate under Section 87A (only in the old tax regime), which brings your total tax liability down to zero.
|
NOTE: The new income tax slab announced in the Budget of 2025 will be applicable from the FY 2025-26 (AY 2026- 27). |
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 2024–25)
|
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 2024–25, 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 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.
