Crypto staking has become one of the most popular ways to earn passive rewards in the digital asset world. It allows you to lock up your cryptocurrencies to support the security and operations of a blockchain network. In exchange for this support, you earn additional crypto tokens as rewards, almost like earning interest from a savings account.
However, with rewards come tax responsibilities. In India, the income you earn from crypto staking is not tax-free. Whether you are staking a few coins for personal gains or growing your portfolio over time, it is important to understand how your staking rewards are taxed. This guide explains everything you need to know about the taxation of crypto staking in India, helping you stay compliant while enjoying your staking benefits.
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How Is Crypto Staking Taxed in India?
Crypto staking may seem like a simple way to earn passive income, but it brings specific tax obligations in India. The Income Tax Department treats stake rewards as taxable at two different points: first, when you receive the rewards, and second, when you sell or swap them later. Let’s break it down clearly.
Rewards on Crypto Staking
When you earn staking rewards, they are treated as income under Indian tax laws. The Fair Market Value (FMV) of the rewards, in Indian Rupees (INR) on the day you receive them, must be reported as part of your taxable income.
This staking income is taxed under the head “Income from Other Sources“. It will be added to your total income and taxed according to your income slab rate. You must pay this tax even if you do not sell the staking rewards immediately after receiving them.
Disposal Of Staking Rewards
Apart from income tax at the time of receiving rewards, you will also face capital gains tax when you sell, swap, or spend your staked tokens. The gain is calculated based on the difference between the FMV at the time of receipt and the sale value.
In India, any gains from disposing of crypto assets are taxed at a flat rate of 30%, plus a 4% health and education cess.
Additionally, when you sell your staking rewards on an exchange, a 1% TDS (Tax Deducted at Source) is also deducted by the buyer at the time of sale.
Read More: Ultimate Guide On Crypto Tax in India
How To Calculate Crypto Staking Tax in India?
Calculating your crypto staking tax is important to ensure you report your income correctly and stay compliant with Indian tax laws. You need to calculate taxes both when you receive the rewards and when you sell them later. Let’s break this down in a simple way.
Calculating Staking Income
When you receive staking rewards, you must determine the Fair Market Value (FMV) of the tokens in Indian Rupees (INR) on the day you receive them. This value will be added to your total taxable income for that year.
Here’s the simple formula:
Taxable Staking Income = Fair Market Value (FMV) of staking rewards at receipt |
Example
Simran stakes 1,000 Polkadot (DOT) tokens on a staking platform. Over one year, she earns 100 DOT tokens as staking rewards. On the day she receives the rewards, the Fair Market Value (FMV) of 1 DOT is INR 50. Therefore, her total stake income is:
Staking Income = 100 DOT × INR 50 = INR 5,000 |
This INR 5,000 is added to her total taxable income and taxed according to her applicable income slab for the year.
Read More: How To File Crypto Taxes In India?
Calculating Capital Gains from Staking Rewards
When you later sell, swap, or spend your staking rewards, you must calculate the capital gain. The capital gain is the difference between the sale price and the FMV when you received the staking rewards.
Here’s the simple formula:
Capital Gain = Sale Price – FMV at the time of receipt |
Example:
After six months, Simran decides to sell the 100 DOT tokens. At the time of sale, the FMV of 1 DOT has increased to INR 70. The total selling price becomes:
Selling Price = 100 DOT × INR 70 = INR 7,000 |
To calculate her capital gain:
Capital Gains = Selling Price – FMV at Receipt |
Capital Gain = INR 7,000 – INR 5,000 = INR 2,000
Simran’s capital gain of INR 2,000. Next, we calculate her capital gains tax:
- Flat 30% tax on Capital Gain = 30% of INR 2,000 = INR 600
- 4% Health and Education Cess = 4% of INR 600 = INR 24
Thus, the total tax payable on the capital gain is:
Total Tax = INR 600 + INR 24 = INR 624 |
In addition, when Simran sells her 100 DOT tokens, the crypto exchange will deduct 1% TDS on the selling price:
TDS = 1% of INR 7,000 = INR 70
Simran can later claim this TDS amount while filing her Income Tax Return.
Read More: Best Crypto Staking Platform in 2025
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How Can KoinX Help With Crypto Staking Tax in India?
Keeping track of your staking rewards, their fair market value, and the eventual sale transactions can quickly become complicated. Manually calculating taxes for each transaction is not only time-consuming but also prone to mistakes. This is where KoinX simplifies everything for Indian crypto investors.
Accurate Preview of Capital Gains
KoinX gives you a clear and error-free preview of your capital gains across all your staking and other crypto activities. This helps you stay informed about your tax liabilities before making any selling decisions.
Auto-Classification of Transactions
All your transactions are automatically sorted into different categories like staking rewards, airdrops, or trades. This classification ensures that your gains are recorded correctly for accurate tax reporting.
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Reliable Tax Reports
KoinX generates detailed and reliable tax reports that are easy to file directly with your tax returns or share with your accountant. This reduces the chances of errors and makes your filing process smoother.
Portfolio Insights
KoinX provides deep insights into your entire crypto portfolio, helping you monitor your assets and make better investment decisions over time.
Advanced Assistance from Experts
If you have complex tax situations, KoinX offers access to crypto tax professionals who can guide you through filing your Income Tax Return (ITR) and managing TDS compliance.
Stay ahead with your crypto staking taxes and simplify your tax journey — join KoinX today and take control of your crypto finances!
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Conclusion
Crypto staking is a great way to earn passive income, but it brings important tax responsibilities you must not ignore. In India, staking rewards are taxed both when you receive them and when you later sell or swap them.
By understanding how income tax and capital gains tax apply to your staking rewards, you can stay compliant and avoid penalties. Using a platform like KoinX can make tax calculation easier, helping you focus more on growing your crypto portfolio confidently.
Frequently Asked Questions
What Happens If I Do Not Sell My Staking Rewards?
Even if you do not sell your staking rewards, you must still pay income tax on their fair market value at the time you receive them. The taxation at the income stage happens first. Capital gains tax will only apply if and when you eventually sell or swap the staking rewards.
Is Crypto Staking Legal in India?
Yes, crypto staking is legal in India. There are no laws prohibiting staking activities. However, it is important to remember that staking rewards are treated as taxable income, and you must comply with the Indian Income Tax rules to avoid penalties or fines.
Is There Any Tax on Stake Withdrawal in India?
There is no separate tax on stake withdrawal itself in India. However, when you withdraw staking rewards, the Fair Market Value at the time of receipt is considered taxable income. If you later sell or swap these rewards, you will also be liable to pay capital gains tax based on the profit made.
Is Staking Crypto Worth It?
Crypto staking can be a comfortable way to earn passive rewards if you plan to hold your tokens for a long time. Staking yields can help offset token inflation and boost your overall holdings over time. However, it is important to understand the risks, including price volatility and lock-up periods, before staking.
