Crypto Tax in India 2025: What Every Trader Needs to Know

Crypto adoption in India continues to grow rapidly, but so does the government’s oversight. If you’re trading, investing, or even receiving airdrops, understanding crypto tax in India 2025 is now more important than ever. 

With new amendments and tighter compliance, the tax rules around digital assets have evolved, and this guide will help you stay ahead. Read this article to find out more!

Crypto Tax Regulations in India 2025 

As of the financial year 2024–2025, cryptocurrencies are legally categorized as Virtual Digital Assets (VDAs) under the Income Tax Act, 1961, updated with the Income Tax (No. 2) Bill, 2025. 

Any digital token, from Bitcoin and meme coins to NFTs, is considered a VDA unless it’s recognized as fiat currency.

Crypto is allowed but not recognized as legal tender, meaning you can trade and hold it, but you can’t officially use it as a payment method. 

The Indian government monitors crypto activities through several institutions:

- Income Tax Department & CBDT: Enforce and design tax policies.

- FIU-IND: Ensures platforms comply with anti-money laundering (AML) rules.

- RBI & SEBI: Oversee broader financial stability and investor protection

These agencies collectively ensure crypto remains a tax-compliant and transparent financial activity in India.

Read Also: List of Countries Where Crypto Tax-Free in 2025

Flat Tax Rules on Crypto in India 2025

One of the biggest changes impacting traders is the flat tax rate system in India 2025:

So, whether you hold a token for one day or one year, your profit still gets taxed at 30% under Section 115BBH.

Read Also: Why Calculating Income Tax Matters for Crypto Traders and Investors

Taxable Crypto Activities in India

A taxable event is any crypto-related activity that generates income or financial gain.

Taxable crypto activities:

1. Trading crypto for fiat or swapping crypto for another token.

2. Staking rewards credited to your wallet.

3. Airdrops or hard fork tokens.

4. Mining rewards.

5. Receiving crypto as payment for goods or service.

Non-taxable activities:

1. Simply holding crypto without selling.

2. Transferring tokens between your own wallets.

3. Buying crypto and keeping it without trading.

Read Also: India's Income Tax Bill 2025: What You Need to Know

Example of Crypto Tax Calculation In India

Let’s break it down with a simple scenario of crypto tax calculation in India 2025:

- You bought crypto worth ₹100,000

- Later, you sold it for ₹150,000

So even before calculating profit, TDS is deducted, helping the government maintain transaction visibility.

Read Also: Income Tax Portal Deadline Extended? India's Latest Tax News 2025

How to Report Crypto in India 2025

All crypto gains must be reported in your Income Tax Return (ITR):

Reporting Guidelines:

- Use ITR-2 if crypto is a capital gain activity (occasional trading or investing).

- Use ITR-3 if trading crypto regularly like business income.

- Fill out the Schedule VDA section clearly with transaction details

Failure to report can lead to penalties, investigations, and blocked withdrawal rights on exchanges.

Read Also: Is Crypto Legal in India? Here's the Answer and Why

Conclusion

Crypto in India is not banned, it’s regulated. The government isn’t trying to stop trading but wants clear records and fair taxation. 

If you're planning to be active in crypto markets in 2025, understanding tax rules isn’t optional anymore, it’s part of being a smart investor.

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FAQ

Is crypto legal in India in 2025?

Yes, crypto is legal to trade and hold, but it is not recognized as legal tender.

Can I avoid the 1% TDS?

No, 1% TDS is mandatory on every sale or trade, deducted by the exchange.

Do I need to pay tax if I don't sell my crypto?

No, holding tokens without selling is not a taxable event.

Are staking and airdrops taxed?

Yes, staking rewards, airdrops, and hard fork tokens are taxed as income at the time of receipt.

Can I offset crypto losses against other income?

No, under Section 115BBH, losses from crypto cannot be set off against salary, business, or any other income.