Moment guide · FY 2026-27

I am selling cryptocurrency or other virtual digital assets

What tax do I pay on crypto gains in India?

Sec 115BBHSec 194SSec 2(47A)Sec 56(2)(x)Verified 2026-08-11

Gains on virtual digital assets are taxed at a flat 30% under section 115BBH with no deductions beyond the cost of acquisition, and no loss set-off — not even between different cryptos. A 1% TDS under section 194S is deducted by the buyer on transfers, and crypto-to-crypto swaps are themselves taxable events at FMV. Gifted VDAs take the FMV at the gift date as cost, while mined or airdropped coins have nil cost.

Your legitimate options

Every route the statute actually gives you — with its condition, cap and deadline.

Route	Condition	Cap / deadline
30% flat tax on gains	All gains on virtual digital assets taxed at a flat 30% u/s 115BBH, with no deduction for expenses except the cost of acquisition	No set-off of losses, including against other VDA gains
1% TDS on transfers	Buyer deducts 1% TDS u/s 194S on the transfer value; crypto-to-crypto exchanges are taxable events	TDS credit available in the seller's ITR
Gifted VDA	Recipient's cost is the FMV at the gift date; mining or airdrops have nil cost and the full sale value is taxed	Gift of VDA to a non-relative above ₹50k is taxable in the recipient's hands u/s 56(2)(x)

The #1 trap

Thinking losses from one crypto can offset gains from another — section 115BBH expressly forbids any loss set-off, even between VDAs. The second trap: treating crypto-to-crypto swaps as non-events; each swap is a taxable transfer at FMV, and a person who bought with ₹10L and swapped into another token owes 30% on the notional gain before ever cashing out.

The decision path

Follow it top to bottom — the first condition that matches is your answer.

IF you sell or swap any VDA → the gain is taxed at a flat 30% u/s 115BBH.
IF you made a loss on one crypto and a profit on another → no set-off is allowed, even between VDAs.
IF you exchange one token for another → the swap is a taxable transfer at FMV on the swap date.
IF you received a gifted VDA → your cost is the FMV at the gift date; a non-relative gift above ₹50k is also taxable to you u/s 56(2)(x).
IF you mined or airdropped coins → cost is nil and the full sale consideration is taxed.
IF you buy from an Indian exchange or another buyer → 1% TDS u/s 194S is deducted and credited to your 26AS. [VERDICT: 30% flat, no loss offsets, every swap counts.]

Worked example

Arjun, crypto investor with a mixed portfolio

Arjun bought 0.5 Bitcoin in 2023 for ₹12,00,000 and sells it in 2026 for ₹20,00,000. Under section 115BBH his gain is ₹20,00,000 minus ₹12,00,000, which is ₹8,00,000, and the tax is a flat 30%, which is ₹2,40,000, plus 4% cess on top. He cannot deduct exchange fees, internet costs or any other expense — only the cost of acquisition. In the same year he swapped Ethereum worth ₹3,00,000 into a new token with an FMV of ₹3,00,000 on the swap date; his original cost of the Ethereum was ₹2,50,000, so the swap itself is a taxable transfer with a gain of ₹50,000, taxed at 30%, even though he never converted to fiat. He also lost ₹1,50,000 on a failed altcoin, but that loss cannot be set off against his ₹8,00,000 Bitcoin gain — section 115BBH prohibits set-off entirely, including against other VDAs — so he pays 30% on the full ₹8,00,000 and ₹50,000 with no loss relief. When Arjun sold the Bitcoin on an Indian exchange, the exchange deducted 1% TDS under section 194S on ₹20,00,000, which is ₹2,00,000, and that credit appears in his Form 26AS against his ₹2,40,000 liability. His friend who received Bitcoin as a wedding gift from a relative now holds it with a cost equal to the FMV on the gift date, and a colleague who mined coins has a nil cost, meaning the full sale value is taxed. Arjun reports all VDA transfers in the ITR's virtual digital asset schedule. A quick call with us dials in the final figure. Arjun also reports every transfer in the virtual digital asset schedule of his ITR, because the department matches the 1% TDS trail against declared transactions, and an undeclared swap shows up as a mismatch even when no cash moved. If he transfers crypto between his own wallets, that is not a taxable transfer, but a transfer to a friend's wallet is a gift with its own section 56(2)(x) consequences if the value exceeds ₹50,000 and the friend is not a relative. The 30% rate applies to the gains net of the cost of acquisition only; any fees charged by the exchange are not deductible, which is a common over-claim. A quick call with us dials in the final figure.

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Questions people actually ask

What is the tax rate on crypto gains?

A flat 30% under section 115BBH on all VDA gains, with no deductions except the cost of acquisition and no loss set-off of any kind.

Is crypto-to-crypto a taxable event?

Yes — every swap or exchange of one virtual digital asset for another is a taxable transfer at FMV on the swap date.

What is the cost of gifted or mined crypto?

Gifted VDA takes the FMV at the gift date as cost; mined and airdropped coins have nil cost, so the full sale value is taxed.

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Sections: 115BBH, 194S, 2(47A), 56(2)(x) · Last verified 2026-08-11 · Reviewed by Harun Raaj & Associates, Chartered Accountants. Every figure cites the Income-tax Act, 1961 (with ITA 2025 mapping via our section index).