Crypto Tax in India 2026: 30% VDA Tax, 1% TDS and Schedule VDA Explained

India taxes crypto, NFTs and other Virtual Digital Assets (VDAs) under a special, very strict regime introduced by Finance Act 2022 — and the rules continue unchanged for FY 2025-26 (AY 2026-27). Whether you trade on WazirX, CoinDCX, Binance or hold on a self-custody wallet, here's exactly how the tax works.

The 30% flat tax — Section 115BBH

Every rupee of profit from transfer of a VDA is taxed at a flat 30% (plus 4% cess and applicable surcharge). It does not matter which slab you fall into — even a salaried person in the 5% slab pays 30% on crypto gains.

No deductions, no set-off, no carry-forward

• Only cost of acquisition is allowed as a deduction. Internet bills, exchange fees, mining costs etc. are not deductible.
• Losses from one VDA cannot be set off against gains from another VDA — or against any other head of income.
• VDA losses cannot be carried forward to future years.

Practical impact: if you make ₹1L profit on Bitcoin and ₹1L loss on Ethereum in the same year, you still pay 30% tax on the ₹1L Bitcoin gain.

1% TDS under Section 194S

Every transfer of a VDA (sell, swap, P2P, even crypto-to-crypto) attracts 1% TDS on the gross consideration. Indian exchanges deduct this automatically. For P2P and foreign-exchange trades, the buyer is legally responsible for deducting and depositing the TDS.

Gifts of crypto

Crypto received as a gift is taxable in the hands of the receiver at slab rates (Section 56(2)(x)) if value exceeds ₹50,000 in a year, unless from a specified relative or on the occasion of marriage.

Schedule VDA — how to report in your ITR

From AY 2023-24 onwards, every taxpayer with VDA income must fill Schedule VDA in ITR-2 / ITR-3 with date of acquisition, date of transfer, cost, consideration and head of income (capital gains or business income). The schedule is mandatory even for a single transaction.

Common mistakes we see

• Netting off losses against gains — directly disallowed
• Missing P2P / foreign-exchange trades that have no TDS trail
• Treating staking / airdrops / mining rewards as tax-free
• Filing ITR-1 instead of ITR-2/3
• Forgetting Schedule FA for crypto held on foreign exchanges

Tax Easy India offers a dedicated Crypto / VDA Tax Consultant service — we import your full P&L from WazirX, CoinDCX, Binance, Kraken and self-custody wallets, reconcile 1% TDS, and report Schedule VDA correctly. Talk to a crypto tax expert before you file.