Quick Answer: In India, crypto gains are taxed at a flat 30% under Section 115BBH (no deductions except cost of acquisition allowed; no loss offset against other income or carry-forward). TDS at 1% under Section 194S applies on crypto transfers above ₹10,000 per year (₹50,000 for specified individuals). Crypto received as gifts, mining income, or airdrops is taxed at slab rates as "other income".
Crypto Tax India — Section 115BBH Rules
India introduced a specific tax regime for Virtual Digital Assets (VDA) — including Bitcoin, Ethereum, and all cryptocurrencies — from FY 2022-23. The rules are strict: 30% flat tax, no deductions (except cost of acquisition), no set-off of losses, and 1% TDS on transfers above ₹10,000.
Crypto Tax Rules at a Glance
| Rule | As per Section 115BBH |
|---|---|
| Tax Rate | 30% flat + 4% cess = 31.2% |
| Deductions Allowed | Only Cost of Acquisition (CoA) |
| Losses | Cannot set off against any income |
| Loss Carry Forward | Not allowed |
| TDS | 1% u/s 194S above ₹10,000/year |
| Gifting | FMV on date of gift = CoA for recipient |
| Mining Income | Taxable as business income + VDA tax at sale |
Frequently Asked Questions
No. Losses from VDA/crypto cannot be set off against any other income — not against salary, house property, capital gains from stocks, or any other head. This is explicitly prohibited by Section 115BBH(2). You also cannot carry forward crypto losses to future years.
Yes. All VDA transactions (buy, sell, swap, gift) must be reported in Schedule VDA of the ITR even if there is no gain. Failure to report can attract scrutiny and penalties. Use ITR-2 or ITR-3 if you have VDA income — ITR-1 cannot be used.