Data is AI-generated from 20+ public sources. Last updated June 2026. Disclaimer | Report error
Virtual Digital Assets — crypto, NFTs, tokens — face a flat 30% tax with almost no relief. No loss set-off, no carry-forward, no deductions. Here's what you need to know for FY 2026-27.
on transfer gains. No slab rates. No indexation. No LTCG benefit.
WHAT YOU CAN DEDUCT
WHAT YOU CANNOT DEDUCT
Calculation: Tax = 30% × (Sale Price − Cost of Acquisition). That's it. No other arithmetic is allowed.
Section 2(47A) of the Income Tax Act defines a Virtual Digital Asset broadly:
IS A VDA
NOT A VDA
Every crypto sale triggers 1% TDS under Section 194S. This is deducted by the exchange or the buyer.
| Person | TDS Threshold | Rate |
|---|---|---|
| General buyer / exchange | ₹50,000 / year | 1% |
| Specified persons (HUF, certain others) | ₹10,000 / year | 1% |
NOT AN EXTRA TAX
Like all TDS, this is an advance payment toward your final tax. If your final crypto tax is 30% on gains, the 1% TDS is adjusted. You get the difference as a refund (or pay the balance).
The VDA tax is deliberately punitive. The government's message is clear: we tolerate crypto, but we won't encourage it.
NO SET-OFF
Crypto losses cannot offset any other income — not even crypto gains from a different coin. Each VDA transaction is taxed independently.
NO CARRY-FORWARD
Unlike equity (8 years) or business losses (8 years), VDA losses disappear permanently. You cannot carry them to next year.
NO INDEXATION
Even if you held Bitcoin for 5 years, there is no inflation adjustment. You pay 30% on the raw gain.
NO EXPENSE DEDUCTION
Transaction fees, gas fees, mining costs, electricity — none of these reduce your taxable gain. Only the buy price matters.
If someone gifts you crypto worth more than ₹50,000 and they are not a relative, the value is taxable in your hands under Section 56(2)(x).
| From | Taxable? |
|---|---|
| Relative (spouse, children, parents, siblings) | Never taxable |
| Non-relative, value ≤ ₹50,000 | Not taxable |
| Non-relative, value > ₹50,000 | Full value taxable at slab rates |
If you traded crypto during the year, you must file Schedule VDA in your ITR. This is a separate schedule listing every transaction.
NON-FILING = NOTICE
If you traded crypto but didn't file Schedule VDA, the income tax department can send a notice. The 1% TDS on 194S creates a trail — they know you traded.
What to report:
If you earn crypto through mining or staking, the income is taxed differently from trading gains.
| Activity | Tax Rate | Head |
|---|---|---|
| Mining rewards | Slab rates | Income from Other Sources |
| Staking rewards | Slab rates | Income from Other Sources |
| Subsequent sale of mined/staked crypto | 30% VDA rate | Capital Gains (VDA) |
DOUBLE TAX
Mining income is taxed once at slab rates when received, and again at 30% when you sell the mined crypto. The cost of acquisition for the 30% calculation is the market value at the time of mining.