India's crypto taxes: what the law says Since April 2022, India has treated income earned from cryptocurrency—technically referred to as Virtual Digital Assets (VDAs)—as a separate class of income. If you have earned profits on selling, trading, or crypto exchange in FY 2024–25 (April 1, 2024, to March 31, 2025), you must report it while filing your ITR in July 2025. The tax rate is as burdensome: 30% plus 4% cess, regardless of the income slab. No exemptions except for the cost of acquisition, and crypto losses cannot be set off against any other income.
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Who must report crypto in ITR You must report crypto gains if you've transferred or sold coins like Bitcoin, Ethereum, or stablecoins—even if you used them to buy a new token. Airdrops, mining rewards, and gifts are also taxable occurrences. If you've received crypto for services, it is reported as business income. Taxpayers with cryptocurrency income, on the other hand, typically use ITR-2, while frequent traders or as a business use ITR-3. If you don't report or misreport your income, then you are likely to be charged with penalties or a notice of tax.
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Filing with Schedule VDA: step by step The Income Tax Department has specifically designed a section called Schedule VDA in ITR forms to account for cryptocurrency activity. You will need to report the details of every crypto transaction—date of purchase, date of sale, price of sale, cost of acquisition, and profit therefrom. In case you've had multiple transactions, these need to be reported separately. The portal will calculate the 30% tax automatically after deducting any TDS (tax deducted at source). This year, the department has stepped up vigilance, so do not leave out or round off small transactions.
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How to claim TDS credit Since July 2022, 1% TDS is deducted on crypto transfers above ₹10,000 per financial year. This deduction is visible in your Form 26AS or Annual Information Statement (AIS). Before filing your return, download these from the income tax e-filing portal and ensure all TDS entries match your actual crypto transactions. You’ll be able to claim this amount as a credit against your final tax liability. If the TDS is not showing, call the counterparty or exchange to update their TDS return.
Correct reporting tips Keep a record of wallet activity, exchange statements, and transaction screenshots. Most taxpayers use crypto portfolio tracking software or get CSV files from the exchanges to compute gains. If you have been trading on more than one platform—like CoinDCX, WazirX, Binance, or even DeFi wallets—you must pool all trades. If valuation or treatment is uncertain, take the advice of a tax professional, especially if you've earned in foreign exchanges or through complex tokens like NFTs.
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Fully and correctly report your crypto gains Cryptocurrency may be decentralised, but the Indian tax authority is not blind to it. In FY 2024–25, all virtual digital asset gains need to be reported in your ITR in Schedule VDA. Maintain records in proper order, reconcile TDS with your Form 26AS, and do not expect any lenience on loss set-offs. Now that the Income Tax Department is using analytics to match the blockchain data, honesty is the best strategy.
