How Crypto Taxation Works in India
From FY 2022-23, cryptocurrency and other Virtual Digital Assets (VDA) are taxed at a flat 30% rate on gains, plus 4% cess and applicable surcharge. No deduction except cost of acquisition is allowed. Additionally, 1% TDS is deducted on every transaction above ₹10,000.
Formula
Crypto Gain = Sale Price - Purchase Price
Tax = Gain × 30% × (1 + 4% cess)
Effective Rate = 31.2% (30% + 4% cess)
TDS = Transaction Value × 1%⚠️ Important Crypto Tax Rules
- •No Loss Set-Off: Crypto losses cannot be set off against any income, including other crypto gains
- •No Deductions: No deduction for transaction fees, exchange charges, or any other expenses except cost of acquisition
- •1% TDS: Exchanges deduct 1% TDS on every transaction above ₹10,000 (₹50,000 for specified persons)
- •Every Trade is Taxable: Crypto-to-crypto trades (BTC to ETH) are taxable events in INR terms
What Counts as Virtual Digital Asset (VDA)?
Included: All cryptocurrencies (Bitcoin, Ethereum, etc.), NFTs (Non-Fungible Tokens), and any other digital asset that uses cryptographic technology.
Excluded: Indian Rupee or foreign currency, securities as defined in the Securities Contracts Act, and any other asset notified by the government.
Gifting: Gifting crypto is not taxable for the giver, but the recipient must pay tax when they sell it. The cost of acquisition for the recipient is the value on the date of gift.
Example: The 1% TDS Nightmare
You buy Bitcoin for ₹1,00,000 and sell for ₹1,10,000. Your gain is ₹10,000. Tax at 31.2% = ₹3,120. But the exchange also deducts 1% TDS on ₹1,10,000 = ₹1,100. So you pay ₹3,120 tax + ₹1,100 TDS upfront. You can claim the ₹1,100 TDS credit when filing returns, but it creates cash flow issues for frequent traders.
Common questions
How is crypto taxed in India?
From FY 2022-23, cryptocurrency gains are taxed at 30% flat rate (plus 4% cess and applicable surcharge). This applies to all Virtual Digital Assets (VDA) including Bitcoin, Ethereum, NFTs, etc. No deduction except cost of acquisition is allowed.
Can I set off crypto losses?
No. Crypto losses cannot be set off against any other income, including other crypto gains. Each transaction is taxed independently. This makes crypto taxation very harsh in India.
What is 1% TDS on crypto?
From July 2022, 1% TDS is deducted on every crypto transaction above ₹10,000 (or ₹50,000 for specified persons). This is deducted by the exchange from the seller's proceeds. You can claim credit for this TDS when filing returns.
Is crypto legal in India?
Yes, crypto is legal in India. However, it's heavily taxed (30% + cess) and subject to 1% TDS. The government has not banned crypto but has made it less attractive through taxation.
Do I need to pay tax on crypto-to-crypto trades?
Yes. Every crypto-to-crypto trade (e.g., Bitcoin to Ethereum) is a taxable event. You must calculate gains in INR terms and pay 30% tax on the gain.
You might also need
Need something else?
Tell us what calculator would save you time. Popular requests get built first.
Request a calculator →Disclaimer: Crypto taxation in India is complex and evolving. This calculator provides estimates only. Actual tax liability depends on transaction details, holding period, and other factors. Consult a qualified chartered accountant for crypto tax compliance.
Last updated: May 2026