India Crypto Tax Guide: 30% Tax & 1% TDS on VDAs Explained

Short answer: India taxes Virtual Digital Assets under a dedicated regime. Section 115BBH taxes gains on transfer at a flat 30%, plus surcharge and cess, allowing deduction only for the cost of acquisition – and losses cannot be set off against other gains or carried forward. Section 194S requires 1% TDS on transfers above the threshold, which exchanges usually deduct automatically. Reconcile your return against your Annual Information Statement to avoid mismatch notices.

India’s crypto tax is one of the strictest in the world: a flat 30% on gains, 1% TDS on transfers, and no relief for losses.

How are VDA gains taxed in India?

Since April 2022, India taxes Virtual Digital Assets (VDAs) under a dedicated regime. Section 115BBH: gains on transfer are taxed at a flat 30% (plus surcharge/cess), with deduction allowed only for cost of acquisition – exchange fees and other costs generally don’t count, and losses cannot be set off against other gains or carried forward.

What is the 1% TDS, and how do I file?

Section 194S: buyers must deduct 1% TDS on transfers above the threshold – exchanges usually handle this automatically, which means your sale proceeds arrive net of TDS and you claim credit when filing. Receiving crypto as salary or payment is taxed as income first, then the 30% regime applies on later transfer. File in the VDA schedule of your ITR, reconcile against your Annual Information Statement (AIS), and keep exchange statements – mismatches between AIS and your return are a common notice trigger.

Frequently asked questions

What is the crypto tax rate in India?

Gains on transfer of Virtual Digital Assets are taxed at a flat 30% (plus surcharge and cess) under Section 115BBH, with deduction allowed only for cost of acquisition.

What is the 1% TDS on crypto?

Under Section 194S, buyers must deduct 1% TDS on transfers above the threshold. Exchanges usually handle this automatically, so your sale proceeds arrive net of TDS and you claim credit when filing.

Can I set off crypto losses in India?

No. Losses cannot be set off against other gains or carried forward under the VDA regime.

Related guides

• UK Crypto Tax Guide: HMRC, Capital Gains & the 30-Day Rule
• Canada Crypto Tax Guide: Capital Gains vs Business Income
• How Crypto Is Taxed in the US: The Complete 2026 Beginner’s Guide

Sources

• Income Tax Act sections 115BBH and 194S – VDA taxation and TDS on virtual digital assets. Verify at incometax.gov.in.
• CBDT circulars on VDA TDS – Central Board of Direct Taxes guidance on TDS for virtual digital assets.

This guide is general education only – not tax, legal or financial advice. Verify with the source authority and a qualified tax professional before filing.