Crypto is legal in India — but the tax rules are strict. 30% tax, 1% TDS, ITR filing. Here's everything Indian crypto investors must know to stay compliant in 2026.
All crypto gains are taxed at a flat 30% rate — regardless of your income slab. No long-term capital gains benefit. No loss offset against other income. If you buy BTC for ₹1 lakh and sell for ₹1.5 lakh, you owe ₹15,000 tax (30% of ₹50,000 gain). No exemptions, no deductions.
Since 2022, exchanges deduct 1% TDS (Tax Deducted at Source) on every crypto-to-INR transaction above ₹50,000 (or ₹10,000 for certain cases). This TDS is credited against your tax liability in ITR. Keep Form 26AS to claim it. Peer-to-peer (P2P) trades also attract TDS obligations.
Report all crypto transactions in ITR-2 or ITR-3 under "Income from Virtual Digital Assets (VDA)". Even if your exchange is Indian, you must separately declare all gains. Use Koinly or CoinTracker (they auto-generate ITR-compatible reports). Deadline: July 31 each year.
Critical rule: you cannot offset crypto losses against any other income (salary, FD, stocks) or even between different cryptocurrencies within crypto. If your BTC gained ₹1 lakh and your ALT lost ₹80,000, you still pay 30% tax on the ₹1 lakh BTC gain. Plan trades with this in mind.
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