India’s crypto tax framework stabilized in 2025 and remains largely unchanged for the 2026–27 assessment year. The key points apply to individual investors and traders: a flat 30% tax on gains, mandatory Schedule VDA filing, and from April 1, 2026, stricter compliance measures. This guide explains what to report, how to file, and what happens if you miss a deadline.
The 30% flat tax: what it covers
The 30% tax rate applies to all profits from Virtual Digital Assets (VDAs) — which includes Bitcoin, Ethereum, altcoins and any other crypto token traded or held in India. The rate applies regardless of how long you held the asset or the size of the gain.
| Transaction Type | Tax Rate | Notes |
|---|---|---|
| Profit from sale or conversion | 30% | Applies to the difference between sale price and cost basis |
| Profit from transfer (with consideration) | 30% | Applies even if no rupee sale occurs |
| Holding period adjustment | None | 30% applies whether held 1 day or 1 year |
| Loss | Cannot offset | Losses don’t reduce other income and cannot carry forward |
| A trade at 2:1 profit, whether held for a week or two years, faces the same 30% rate. This simplifies the tax structure compared to securities (where long-term capital gains have different rates) but removes any holding-period advantage. |
Schedule VDA filing: line-by-line reporting
Starting April 1, 2026, every crypto transaction must be reported line-by-line on Schedule VDA within your ITR-2 or ITR-3 return. This is a material change from earlier practice where some filers reported only net gains. Each line should include:
- Acquisition date — when you bought or received the asset
- Transfer date — when you sold, swapped, or transferred the asset
- Cost of acquisition — what you paid (in rupees) to buy the asset
- Consideration — what you received (in rupees) when you sold or transferred
- Resulting income — the difference (profit or loss) The form requires transaction-level granularity. If you made 50 trades in a year, Schedule VDA includes 50 lines. Which ITR form? Salaried individuals with crypto income typically file ITR-2. Those with business or professional income use ITR-3. The choice depends on your primary income source, not the crypto activity alone.
TDS (1% withholding) starting April 1, 2026
From April 1, 2026, a 1% Tax Deducted at Source (TDS) applies when you transfer Virtual Digital Assets above ₹10,000 in a single transaction. The intermediary (exchange or service provider) withholds the TDS. Key details:
- The ₹10,000 threshold applies per transaction. A ₹5,000 sale followed by another ₹6,000 sale are two separate transactions.
- TDS is withheld on transfers, not on purchases.
- If you hold the asset for later sale, no TDS applies until you transfer it.
- The 1% is calculated on the consideration (the rupee value at transfer), not the gain. Example: You sell 1 BTC worth ₹2,000,000. TDS is 1% × ₹2,000,000 = ₹20,000, withheld by the exchange.
Loss handling: a critical limitation
Losses from one Virtual Digital Asset cannot offset profits from another or reduce your total income. If you lost ₹50,000 on Ethereum and gained ₹100,000 on Bitcoin, you owe 30% tax on the full ₹100,000 gain. You cannot use the ₹50,000 loss to reduce it. Losses also cannot be carried forward to the next assessment year. If 2025–26 resulted in a net loss, that loss disappears. Only the following year’s profits are taxable. This rule makes tax-loss harvesting ineffective for crypto in India and makes portfolio rebalancing more expensive than in some other jurisdictions.
Filing timeline and penalties
Filing deadline for FY 2025–26 (AY 2026–27): July 31, 2026, for most individuals (those not required to file an audit under section 44AB). New penalties from April 1, 2026:
- ₹200 per day for non-filing of a required exchange statement by the exchange
- ₹50,000 for incorrect or incomplete exchange reporting
- Interest at 1% per month on late-filed returns (from the original deadline) Exchanges are now formally required to file statements of crypto transactions with the Income Tax department. A delay or error by the exchange can trigger penalties separate from your filing obligations. What to do:
- Request a full transaction report from your exchange (purchase date, sale date, amount, rupee value at transaction).
- Calculate cost basis carefully and reconcile with your exchange records.
- File your ITR with Schedule VDA completed before July 31.
- Keep records for at least six years in case of an audit notice.
Practical filing steps
Step 1: Gather your data Export or download a full transaction history from your exchange(s). Include:
- Each buy, sell, swap or transfer
- Date and time
- Rupee value at the time of transaction
- Asset name and quantity Step 2: Calculate cost basis Determine the purchase price for each unit sold. India allows FIFO (First-In-First-Out) and average cost methods, depending on your exchange’s reporting. Confirm your method with your tax advisor if you use multiple exchanges. Step 3: Calculate gains per transaction For each sale or transfer, subtract cost basis from consideration to get the gain or loss. Step 4: Prepare Schedule VDA List each transaction on Schedule VDA with acquisition date, transfer date, cost, consideration, and gain/loss. Many crypto tax software tools (Koinly, CrypTact) automate this step. Step 5: File your ITR File ITR-2 or ITR-3 through the official income tax e-filing portal (incometax.gov.in) with Schedule VDA attached. Ensure all figures match your exchange records.
Common filing mistakes
- Using incorrect rupee values: Using today’s price instead of the transaction-date price.
- Forgetting international trades: If you traded on an offshore exchange, you must still report those gains in India.
- Mixing cost-basis methods: Switching between FIFO and average-cost mid-year without justification can draw audit scrutiny.
- Omitting small transactions: The ₹10,000 TDS threshold does not mean smaller transactions are exempt. Every trade must be reported.
- Timing the ITR filing: Filing after July 31 (even by one day) triggers interest at 1% per month and potential penalties.
What this means for investors
The 30% flat tax is simpler than securities-based taxation but less favorable than long-term capital gains rates on stocks. The new line-by-line reporting from April 1, 2026, makes compliance more granular — you cannot aggregate small trades or omit minor positions. If you actively trade, keep exchange exports organized as you go. If you hold long-term, treat Schedule VDA as a one-time annual reconciliation. Either way, the deadline is July 31 and penalties apply for late or incomplete filing. The loss-offset restriction makes crypto portfolio rebalancing more expensive in India than buy-and-hold, so position sizing and risk management before the trade matter more than tax-loss harvesting afterward.
Bottom line
Schedule VDA is mandatory for any rupee gain or loss from Virtual Digital Assets in the 2026–27 assessment year. File it line-by-line with full transaction details, reconcile with your exchange records, and do so before July 31, 2026. The 30% flat tax rate, 1% TDS on transfers above ₹10,000 (from April 1), and loss-offset restrictions make precise record-keeping and early planning essential. If in doubt, consult a tax advisor familiar with crypto.
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Sources and review
This article was checked against the primary or authoritative sources below .
- ITR Crypto Reporting India AY 2026–27: Where & How to Report Crypto in Your Income Tax Return — cryptact
- Cryptocurrency Tax in India 2026: Rules, Rates, and Filing Requirements Explained — MEXC
- Crypto Tax in India 2026: 30% Tax, TDS & ITR — CoinDCX
- Schedule VDA Filing Guide India 2026 — Richify
- India Crypto Tax Rules 2026: VDA Tax & Compliance Guide — Unchained Summit
Frequently asked questions
Schedule VDA is a dedicated section in ITR-2 or ITR-3 forms where you report every Virtual Digital Asset (crypto) transaction — buys, sells, conversions, and transfers with consideration.
A flat 30% tax applies to profits from Virtual Digital Assets. This rate applies regardless of holding period or the amount of gain.
1% Tax Deducted at Source (TDS) applies when you transfer crypto assets above ₹10,000 in a single transaction. It's withheld by the exchange or intermediary.
No. Losses from Virtual Digital Assets cannot be carried forward to the next year or offset against other types of income (salary, business, etc.).
April 1, 2026. The Income Tax Act 2025 requires line-by-line reporting of every trade, not just net yearly gains. Exchanges face penalties for non-compliance.
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