How crypto (VDA) gains are taxed in India
Worked example
Say you bought crypto for ₹1,00,000 and later sold it for ₹1,80,000. Your gain is ₹80,000, taxed at a flat 30% = ₹24,000, plus 4% cess of ₹960, for a total tax of ₹24,960. Separately, the exchange would have deducted 1% TDS on your ₹1,80,000 sell value — ₹1,800 — which is a credit against this ₹24,960, not an extra charge on top of it.
Gains from transferring a Virtual Digital Asset (VDA) — cryptocurrency, NFTs, and similar digital assets — are taxed under Section 115BBH at a flat 30%, plus 4% Health & Education Cess, making the effective rate31.2% on every rupee of gain. This rate is flat regardless of your income slab, how long you held the asset, or how small the gain is — there is no basic exemption, no distinction between short-term and long-term holding, and no benefit from being in a lower income-tax bracket otherwise.
No deduction except cost of acquisition
Section 115BBH is unusually strict about deductions: the only amount you can subtract from your sale value is the cost of acquiring the asset. No deduction is allowed for transaction fees, internet or electricity costs, mining infrastructure, or any other expense connected with earning or transferring the VDA — no matter how directly related to the transaction those costs were.
No loss set-off — the rule this calculator enforces
The single most important — and most misunderstood — rule under Section 115BBH is that aloss on a VDA cannot be set off against any gain, including a gain from a different VDA in the very same year, and it cannot be carried forward to future years either. Practically, this means every profitable transaction is taxed on its own; loss transactions simply vanish for tax purposes instead of reducing your tax bill. This calculator applies that rule row by row: a loss row contributes ₹0 to your taxable gains, even though its actual (negative) figure is still shown for your own transparency.
Section 194S — 1% TDS at source
Separately from the 30% tax itself, Section 194S requires whoever pays you — typically the crypto exchange — to deduct 1% TDS on the sell value of each transaction and deposit it against your PAN. The TDS threshold depends on who you are: it applies once your total transaction value in a financial year exceeds ₹50,000 for "specified persons" (individuals/HUFs with no business income, or turnover below the tax-audit limit) and ₹10,000 for everyone else. This TDS is not an additional tax; it is simply collected in advance and shows up as a credit in your Form 26AS / AIS, which you then adjust against your final 30% + cess liability when you file your return. In a peer-to-peer trade with no exchange involved, this responsibility shifts to the buyer.
Gifts of crypto are taxable too
Receiving VDAs as a gift is also taxable — the recipient is taxed on the fair market value of the gifted crypto as income from other sources (subject to the usual gift exemptions, such as gifts from specified relatives or gifts below ₹50,000 in aggregate in a year). This is separate from the 30% rate on transfer gains, which applies when the asset is later sold.
Reporting: Schedule VDA in the ITR
The income tax return forms carry a dedicated Schedule VDA where every VDA transaction — date of acquisition, date of transfer, cost of acquisition, sale consideration and the resulting gain — must be reported individually. This calculator's per-transaction table mirrors that structure so you can carry the same figures across when filing. Which ITR form you use depends on how you hold crypto: investors reporting VDA gains as capital gains generally use ITR-2, while those trading VDAs as a business (frequent, high-volume activity) report it as business income on ITR-3.
Unreported VDA income — Section 158B
Don't assume small or "forgotten" crypto transactions go unnoticed. If unaccounted VDA income is detected — for example during a search or survey — it can be taxed at a punitive 60% flat rate under Section 158B, on top of losing every deduction and set-off benefit otherwise available. Accurate, complete reporting in Schedule VDA every year is the only way to avoid this exposure.