How Crypto Tax Works in India: 30% VDA Tax & 1% TDS Explained

Guides · Investing · Updated 2026

Since April 2022, India has had a specific tax framework for Virtual Digital Assets (VDAs) like Bitcoin, Ethereum, and NFTs. If you've traded, staked, or sold any crypto, you need to understand the flat 30% tax on gains, the 1% TDS on transactions, and the strict no‑loss‑offset rule. This guide is neutral and educational — it will help you calculate your crypto tax liability correctly for FY 2025‑26, with a worked example and a tool that does the profit math first.

Why Crypto Tax Is Different from Capital Gains

Unlike stocks or mutual funds, crypto gains don't get indexation benefit, and you can't offset a loss from one crypto against the gain from another — or against any other income. The tax rate is a flat 30% (plus surcharge and 4% cess, making it effectively 31.2% for those below the surcharge threshold). Additionally, a 1% TDS is deducted by exchanges on every sale above a certain volume. This TDS can be claimed back when filing your ITR, but it creates a cash‑flow gap. Also, gifting crypto attracts tax in the hands of the recipient if the value exceeds ₹50,000.

Tax on VDA gains: 30% (plus surcharge + cess).
No deduction allowed except cost of acquisition. No trading fees, internet, or other expenses.
Loss from one VDA cannot offset gain from another VDA; carried‑forward loss concept doesn't apply.
1% TDS on transfer of VDA exceeding ₹50,000 (or ₹10,000 in certain cases) in a financial year.

Step-by-step: Calculate Your Crypto Tax Liability

Open the Crypto Profit Calculator tool to determine your net profit first.
Enter your buy price (cost of acquisition) and sell price for each transaction. The tool calculates the profit.
Multiply the profit by 30% to get the basic tax. Add 4% health and education cess on the tax amount.
If applicable, account for TDS already deducted — this will appear in your Form 26AS and can reduce your final tax payable.

💡 Tip: Keep a separate record of every crypto transaction — date, amount in INR, and the crypto quantity. The 1% TDS deducted by exchanges may not always match your actual gain, so self‑computation is essential.

Worked Example: Selling Bitcoin for a Profit

      Transaction: Bought 0.1 BTC at ₹20,00,000. Sold at ₹28,00,000.

      Profit: ₹8,00,000.

      Tax: 30% of ₹8,00,000 = ₹2,40,000.

      Cess (4%): ₹9,600 → Total tax liability = ₹2,49,600.

      TDS: Exchange may have deducted 1% of ₹28,00,000 = ₹28,000. This is credited against your tax, so net payable = ₹2,49,600 - ₹28,000 = ₹2,21,600.

Remember, if you made a loss on another crypto, you cannot net it against this ₹8,00,000 gain. Each crypto is assessed independently. This guide is informational, not investment or tax advice — consult a Chartered Accountant for your specific case.

Frequently Asked Questions

Is crypto‑to‑crypto trade taxable?

Yes. Trading BTC for ETH is treated as a "transfer" and taxed. The fair market value of the received crypto becomes the sale consideration.

What if I received crypto as a gift?

If the value exceeds ₹50,000 in a year, the entire amount is taxable in the recipient's hands under "income from other sources" at slab rates, not 30%.

Can I deduct gas fees or exchange charges?

No. The Income Tax Act allows only the cost of acquisition as a deduction. Transaction fees, gas, and internet costs cannot be deducted from VDA gains.

How does TDS affect small traders?

Frequent traders face significant TDS outflows. You can claim the TDS credit while filing your ITR, but you must have enough overall tax liability to offset it.

Is it free and private?

Yes — the tool runs entirely in your browser, free, with no sign‑up and nothing uploaded to a server.

Try the Crypto Profit Calculator