Crypto donations are becoming a popular way to support causes and charities around the world. With cryptocurrencies offering fast transfers and global reach, many donors now prefer sending digital assets instead of traditional money. However, while donating crypto can feel rewarding, it also comes with important tax responsibilities in India.
In India, the government treats crypto donations differently from cash donations. Whether you are donating or receiving crypto, it is important to understand how these transactions are taxed. This guide explains everything you need to know about crypto donation taxes, helping you stay compliant and avoid unnecessary surprises during tax season.
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Taxation on Crypto Donations in India
Crypto donations are taxed differently depending on whether you are giving cryptocurrency to a cause or receiving it. Both sides of the transaction have their tax obligations under Indian law. Let’s break them down clearly.
Giving Crypto as a Donation
When you donate cryptocurrency in India, it is treated as a disposal of a virtual digital asset. The donation is considered a taxable event, and you must calculate capital gains on it. The profit is the difference between the fair market value of the crypto on the day of donation and the original cost of acquisition.
This profit is taxed at a flat rate of 30%, along with a 4% health and education cess. There are no exemptions for crypto donations under Section 80G, which normally allows deductions for traditional donations made in cash or through banking channels. Losses on crypto donations cannot be offset against any other income.
Additionally, a 1% Tax Deducted at Source (TDS) may apply if the donation value exceeds INR 50,000 within a financial year. The platform or exchange facilitating the donation may deduct this TDS before completing the transaction.
Receiving Crypto as a Donation
If you receive cryptocurrency as a donation, the tax treatment depends on your relationship with the donor and the value of the received tokens. Crypto donations received from close family members are fully exempt from tax. However, if you receive crypto from a non-relative, the total value is taxable as “Income from Other Sources” if it exceeds INR 50,000 in a financial year.
The entire value of the crypto received is added to your total income and taxed according to your applicable income tax slab rate. If the recipient is a registered charitable trust or non-profit organisation, donations received may not be taxable if they comply with the conditions laid out under Indian tax law.
In both cases, the recipient must also check if a 1% TDS was deducted at the time of receiving the donation and adjust this amount while filing the Income Tax Return.
Crypto Donations Received by Charitable Organizations
Charitable trusts or non-profits that are registered under Sections 12A and comply with the guidelines for receiving donations (often covered under provisions like Section 80G) can accept crypto donations without those funds being taxed as income. This scheme is designed to encourage philanthropic giving and ensure that the donation goes entirely toward the charitable cause.
However, the organization must adhere to strict reporting requirements to maintain its tax-exempt status. Both the donor and the receiving charity must follow proper procedures to avail the benefits; otherwise, the donation might attract tax liabilities.
Read More: Ultimate Crypto Tax Guide in India
How To Calculate Crypto Donation Tax in India?
Calculating your tax on crypto donations requires you to identify whether you are donating the crypto or receiving it. Each situation has its method of calculation. Here’s how you can approach both cases correctly.
Calculating Tax on Donating Crypto
When you donate cryptocurrency, you must calculate your capital gain based on the difference between your acquisition cost and the fair market value on the date of donation.
Here’s the formula:
Capital Gains = Fair Market Value on Date of Donation – Cost of Acquisition |
Once you have the capital gain amount, you must pay a flat 30% tax on this gain. Additionally, a 4% health and education cess is applied on the tax amount. If the value of the donation crosses INR 50,000 during the financial year, a 1% TDS may also be deducted by the platform handling the transaction.
No deductions for transaction fees or losses are allowed when calculating the taxable gain.
Example
Rohit, a crypto enthusiast, bought 10 Solana (SOL) tokens on October 10, 2024. The fair market value (FMV) of 1 SOL at that time was INR 500, making his total acquisition cost:
Cost of Acquisition = 10 × INR 500 = INR 5,000 |
On April 15, 2025, Rohit donated all his Solana tokens to a registered charity. At the time of donation, the FMV of 1 SOL had increased to INR 1,200, making the total sale value:
Fair Market Value at Donation = 10 × INR 1,200 = INR 12,000 |
Now, Rohit calculates his capital gain:
Capital Gain = Fair Market Value at Donation – Cost of Acquisition |
Capital Gain = INR 12,000 – INR 5,000 = INR 7,000
The tax on this capital gain is calculated as:
- 30% of INR 7,000 = INR 2,100 (Capital Gains Tax)
- 4% of INR 2,100 = INR 84 (Cess on Tax)
Thus, Rohit’s total tax liability becomes:
Total Capital Gains Tax = INR 2,100 + INR 84 = INR 2,184 |
Additionally, the donation platform deducts 1% TDS on the total donation value:
TDS = 1% of INR 12,000 = INR 120
Rohit can later claim this TDS amount while filing his Income Tax Return if he does not have any tax liability.
Calculating Tax on Receiving Crypto
If you receive cryptocurrency as a donation and it comes from a non-relative, you must check if the total value of all such gifts during the financial year exceeds INR 50,000. If it does, the entire value becomes taxable under “Income from Other Sources.”
Here’s the formula:
Taxable Income = Number of Tokens Received × Fair Market Value of Crypto Received |
This taxable amount is added to your total income for the year and taxed according to your applicable slab rate. If a 1% TDS was deducted by the donor, you can claim this amount as a credit while filing your Income Tax Return.
Example
In August 2024, Priya received 50 USDT as a donation from a non-relative. On the date of receipt, the fair market value of 1 USDT was INR 85.
Taxable Income = 50 × INR 85 = INR 4,250 |
Since the total value of gifts received is INR 4,250, which is less than INR 50,000, it will not be taxable.
However, Priya later receives another donation of 700 USDT in November 2024 at a fair market value of INR 90 each, her total gift value for the year becomes:
Taxable Income = 700 × INR 90 = INR 63,000 |
Total Gift Value = INR 63,000 + INR 4,250 = INR 67,250 |
Since the total exceeds INR 50,000, the entire INR 67,250 will now be taxable under “Income from Other Sources” and taxed as per Priya’s applicable slab rate. If a 1% TDS was deducted by the donor, Priya can claim it while filing her Income Tax Return.
Read More: How To Pay Zero Tax on Crypto in India?
How Can KoinX Help With Crypto Donation Tax in India?
Handling crypto donations manually can become confusing, especially when you need to track fair market values, capital gains, and TDS deductions. KoinX simplifies the entire process for Indian crypto users. Here’s how it helps you stay compliant with donation-related taxes:
Accurate Preview of Capital Gains
KoinX gives you an accurate preview of your capital gains when you donate cryptocurrency. By using real-time market data, it calculates how much profit you have made since you acquired the crypto, helping you estimate your capital gains tax liability even before you make the donation.
Auto-Classification of Transactions
All your donation transactions are automatically classified by KoinX under the correct categories. This ensures that donation disposals and income from received crypto gifts are recorded separately, avoiding confusion during tax filing. You do not need to manually label or adjust each transaction.
Reliable Tax Reports
The platform generates reliable tax reports that reflect your crypto donation activities accurately. These reports include your capital gains from donations, taxable income from received gifts, and TDS deductions. You can easily use these reports to file your Income Tax Return or share them with your accountant for faster compliance.
Portfolio Insights
With KoinX, you get a full view of your crypto portfolio, including donations made and donations received. You can track how each transaction affects your total holdings and plan your future donations or asset disposals better. Clear insights help you make informed financial decisions.
Advanced Assistance from Experts
If you are unsure about handling crypto donation taxes, the software connects you with India’s best crypto tax experts. They can help you accurately report crypto disposals, claim TDS deductions, and manage any complex filing requirements related to donated cryptocurrencies.
Simplify your crypto donation tax calculations — join KoinX today and stay ahead with accurate filing and stress-free compliance!
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Conclusion
Donating cryptocurrency is a generous act, but in India, it comes with clear tax responsibilities. Whether you are giving or receiving crypto, you must calculate taxes correctly and report them based on fair market values. Staying compliant with Indian tax laws ensures that your donations do not create unexpected tax problems later.
If you want to simplify crypto donation taxes and file error-free returns, KoinX is the perfect solution. Join KoinX today and manage your crypto taxes with complete confidence.
Frequently Asked Questions
Can I Claim A Tax Deduction For Donating Crypto In India?
No, you cannot claim a tax deduction for donating cryptocurrency in India. Under current tax laws, only donations made through banking channels or in cash (up to INR 2,000) are eligible for deductions under Section 80G. Crypto donations are treated as asset disposals and are subject to capital gains tax instead.
Is There A Minimum Limit For Crypto Donation Taxation?
There is no minimum limit for taxation when you donate cryptocurrency. Even small donations are considered disposals of virtual digital assets and must be reported for capital gains tax. However, the 1% TDS deduction only applies if the transaction value crosses INR 50,000 in a financial year.
What Happens If I Donate Crypto With A Loss?
If you donate cryptocurrency whose value is lower than your original acquisition cost, you still cannot claim a loss under Indian tax laws. Section 115BBH does not allow setting off losses from virtual digital assets against other income. Only gains are taxed, and losses from donations cannot be adjusted.
Can Charitable Trusts Accept Crypto Donations In India?
Yes, charitable trusts and non-profit organisations registered under Section 12A can accept crypto donations in India. If the organisation complies with regulatory guidelines, donations received are not treated as taxable income. However, the organisation must maintain proper records of donations and follow disclosure requirements for compliance.
Do I Need To Report Crypto Donations Received From Family?
If you receive cryptocurrency donations from close family members like parents, siblings, or spouse, you do not need to pay tax on them. These gifts are fully exempt from tax, regardless of the amount. However, it is advisable to keep documentary proof showing the relationship and the details of the transaction.
