How Much Tax on Crypto in India (Update 2026)

Cryptocurrency taxation in India remains one of the strictest among major economies. Since the introduction of specific rules for virtual digital assets, investors must understand exactly how gains are taxed, how TDS applies, and how to calculate their liability correctly. 

If you trade, invest, stake, or receive crypto as a gift, the tax implications can differ. This updated 2026 guide explains the current framework clearly so you can plan properly and remain compliant.

Key Takeaways

• Crypto gains in India are taxed at a flat 30% rate plus 4% cess.
• A 1% TDS applies to most transfers above specified thresholds.
• Losses cannot be set off against other income or carried forward.

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Are Cryptocurrencies Taxed in India?

Yes, cryptocurrencies are taxed in India under the classification of virtual digital assets. The taxation framework was formally introduced in the Union Budget 2022 and continues to apply in 2026. 

Under Section 115BBH of the Income Tax Act, profits from the transfer of virtual digital assets are taxed at a flat rate of 30%.

This 30% applies to the net gain from the transaction. On top of that, a 4% health and education cess is added to the tax amount. 

Unlike traditional capital gains tax, there is no distinction between short term and long term holdings for crypto. The rate remains the same regardless of how long you hold the asset.

Another important feature is that no deductions are allowed except for the cost of acquisition. 

This means you cannot deduct transaction fees, exchange charges, mining expenses, electricity costs, or other related expenditures. 

Only the purchase price can be subtracted from the selling price when calculating taxable gain.

Loss treatment is also restrictive. If you incur a loss on one crypto transaction, you cannot set it off against gains from another crypto asset. 

You also cannot adjust it against other income such as salary, business income, or capital gains from shares. Additionally, losses cannot be carried forward to future years.

Crypto received as a gift may also be taxable. If the value exceeds ₹50,000 and it is not received from specified close relatives, the recipient may need to pay tax under applicable provisions. 

This adds another layer of consideration for those transferring digital assets between individuals.

Read also: Do You Pay Tax on Crypto Gains? Yes

How Does 1% TDS on Crypto Work?

In addition to the 30% tax on gains, India applies a 1% Tax Deducted at Source on crypto transfers above certain thresholds. The objective of TDS is to create a reporting trail and improve compliance.

For individuals and Hindu Undivided Families with business turnover up to ₹1 crore or professional receipts up to ₹50 lakh, the 1% TDS applies once annual crypto transfers exceed ₹50,000. For other individuals, the threshold is ₹10,000 per year.

The TDS is deducted on the total transaction value, not on the gain. For example, if you sell crypto worth ₹100,000, ₹1,000 may be deducted as TDS even if your actual profit is much lower. This can affect liquidity, especially for high frequency traders.

On Indian exchanges, the TDS is generally deducted automatically at the time of sale. However, in peer to peer transactions or when dealing with foreign exchanges, the buyer may be responsible for deducting and depositing the TDS with the government. Failure to comply can attract penalties.

When filing your Income Tax Return, crypto gains must be disclosed under Schedule VDA. Even if there is no separate mandatory disclosure of holdings for individuals outside that schedule, accurate reporting of gains is essential.

To calculate tax on crypto gains, the formula is straightforward:

Taxable Gain equals Sale Price minus Purchase Price.

If you bought Bitcoin for ₹60,000 and sold it for ₹80,000, your gain is ₹20,000. The tax at 30% would be ₹6,000, plus 4% cess on that amount. If you instead sold at a loss, that loss cannot reduce your tax liability from other gains.

Keeping detailed records of purchase price, sale price, dates, and TDS deducted is crucial for correct reporting.

Read also: How to Legally Save Tax on Bitcoin Investments in India

Trading and Record Keeping with Exchanges

Clear transaction records are essential under India’s crypto tax regime. Since losses cannot be offset and TDS applies to gross transfers, tracking each trade accurately becomes important for both compliance and financial planning.

Using a centralised exchange such as Bitrue can make this process more organised. Bitrue provides structured trade history, order records, and downloadable transaction statements that can assist when calculating taxable gains.

If you plan to trade crypto on Bitrue, the process is simple:

1. Create and verify your Bitrue account.
2. Deposit funds such as USDT or supported assets into your wallet.
3. Choose a trading pair and review the market chart.
4. Place a market order for instant execution or a limit order at your chosen price.
5. Monitor your trades and download your transaction history when needed for tax reporting.

A regulated exchange environment helps maintain transparency in pricing and execution. While tax obligations remain your responsibility, having organised records can reduce errors when filing returns.

Read also: Introduction to Bitrue Alpha - Completed Explanation

Conclusion

Crypto tax in India continues to follow a strict structure in 2026. Gains are taxed at a flat 30% rate with an additional 4% cess, and a 1% TDS applies to most transfers above specified limits. 

Losses cannot be offset or carried forward, and only the purchase cost is allowed as a deduction. 

For investors and traders, understanding these rules before entering the market is essential. Using a structured exchange like Bitrue can simplify trade tracking and provide clearer records, helping you manage your crypto activity more efficiently and with greater confidence.

FAQ

How much tax on crypto in India in 2026?

Crypto gains are taxed at a flat 30% rate plus 4% cess, regardless of holding period.

What is 1% TDS on crypto?

It is a 1% tax deducted on the total transaction value of crypto transfers above certain annual thresholds.

Can crypto losses be adjusted against other income?

No, losses from crypto cannot be set off against other income or even other crypto gains.

Do I need to report crypto in my Income Tax Return?

Yes, crypto gains must be reported under Schedule VDA in the Income Tax Return.

Is TDS deducted automatically on exchanges?

On many Indian exchanges it is deducted automatically, but in peer to peer or foreign transactions, the responsibility may fall on the buyer.

Disclaimer: The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.