If you’re investing in cryptocurrency in India, understanding the tax rules isn’t optional—it’s essential. Since April 2022, the Indian government has enforced one of the strictest crypto tax regimes in the world, with clear (and costly) implications for every trader, investor, and casual user.
Here’s everything you need to know about how crypto is taxed in India—in plain, practical terms.
1. 30% Flat Tax on All Crypto Gains
Any profit you make from transferring (selling, swapping, or spending) virtual digital assets (VDAs)—including Bitcoin, Ethereum, stablecoins, and NFTs—is taxed at a flat rate of 30%, plus applicable surcharge and cess (bringing the effective rate to ~31.2–42.7%, depending on your total income).
Key things to note:
No deductions allowed: You cannot subtract expenses like transaction fees, mining costs, or even losses from other investments.
No indexation benefit: Unlike real estate or debt funds, you can’t adjust your purchase price for inflation.
Applies to all gains: Whether you held for a day or a decade, short-term and long-term gains are taxed the same.
💡 Example: You buy ₹1 lakh worth of Bitcoin and later sell it for ₹1.5 lakh. Your gain = ₹50,000 Tax due = 30% of ₹50,000 = ₹15,000 (plus ~4% cess = ~₹15,600 total)
2. 1% TDS on Every Crypto Transaction
Since July 2022, a 1% Tax Deducted at Source (TDS) is applied to all crypto transfers above certain thresholds:
₹10,000 per day (or ₹50,000 for specified cases like P2P trades)
Applies to every sale or trade, even if you’re selling at a loss
The exchange or platform automatically deducts this 1% and remits it to the government. You’ll see it reflected in your transaction history.
⚠️ Important: Even if your overall portfolio is down, you still pay TDS on each individual sale. You can claim a refund when filing your ITR—but only if your total crypto gains for the year are negative.
3. Crypto Losses Cannot Be Offset
This is one of the most criticized aspects of India’s crypto tax law: ❌ You cannot use crypto losses to offset gains from stocks, real estate, or other sources ❌ You cannot carry forward crypto losses to future years
If you lose money on one trade but profit on another, you pay 30% tax on the profit—and get no relief for the loss.
4. Staking, Mining, and Airdrops Are Also Taxable
Staking rewards, mining income, and airdrops are treated as “income from other sources” and taxed at your applicable income tax slab rate (up to 30% + cess).
The value is calculated based on the fair market price on the day you receive it.
If you later sell these assets, you’ll owe another 30% tax on any additional gains.
5. Mandatory Reporting in Income Tax Returns
All crypto transactions must be reported under Schedule VDA in your annual ITR. Exchanges are required to share your transaction data with the Income Tax Department under the Statement of Financial Transactions (SFT) rules—so don’t assume you can fly under the radar.
Failure to report can lead to notices, penalties, or scrutiny.
How to Stay Compliant (and Minimize Headaches)
✅ Keep detailed records of every buy, sell, swap, and reward—including dates, amounts, and INR values ✅ Use a trusted platform like ORBRUS that provides clear, exportable tax reports ✅ File your ITR accurately using Schedule VDA ✅ Consult a CA familiar with India’s crypto tax laws—especially if you trade frequently
Why ORBRUS Helps Indian Users Stay Compliant
ORBRUS supports Indian investors with:
Transparent INR deposit and withdrawal options
Ability to buy Bitcoin instantly or trade Ethereum with full transaction history
Low trading fees and clear breakdown of TDS deductions
Secure storage via the ORBRUS Cold Wallet—the world’s safest crypto wallet—to protect your assets while staying within legal boundaries
We believe in clarity, compliance, and control—so you can invest with confidence, not confusion.
Final Thought
India’s crypto tax rules are tough—but they’re here to stay. The government is signaling that crypto is legal to own and trade, but it will be heavily taxed and closely monitored.
Don’t let complex rules scare you away. Stay informed. Keep records. Trade responsibly.
