India Crypto Tax 2025: A Complete Guide

The rapid growth of cryptocurrency and digital asset trading in India has been matched by comprehensive regulations and an evolving tax regime. As of 2025, every Indian resident or business engaging with crypto must understand their tax obligations to avoid penalties and ensure compliance with the Income Tax Department (ITD). This all-in-one guide walks you through every aspect of crypto taxation in India, including the latest rules, reporting strategies, and tools like the WEEX Tax Calculator to simplify your process.

Do You Pay Cryptocurrency Taxes in India?

Absolutely. Anyone earning, trading, investing, or even gifting cryptocurrency in India is subject to a specialized tax framework. The Finance Act 2022 officially classified cryptocurrencies, non-fungible tokens (NFTs), and similar assets as Virtual Digital Assets (VDAs), placing them firmly within the purview of Indian taxation.

What Activities Are Taxable?

The scope is broad. Indian tax law covers almost every significant crypto transaction:

Crypto Activity	Is It Taxable?	Tax Type
Buying crypto with INR	Yes (1% TDS)	Tax Deducted at Source
Selling crypto for INR	Yes	30% tax on gains + 1% TDS
Swapping crypto (crypto-to-crypto)	Yes	30% tax on gains + 1% TDS
Spending crypto on goods/services	Yes	30% tax on gains
Receiving airdrops, mining, staking	Yes	Slab-rate income tax on receipt
Gifting crypto	Sometimes	Taxable for the recipient (see below)
HODLing or moving between own wallets	No	Not taxable
Lost/stolen crypto	No	Not taxable; cannot offset losses

As this table shows, only a limited number of activities—such as holding crypto or transferring funds between your own wallets—are not taxed.

Who Needs to File?

Any individual, company, partnership, or Hindu Undivided Family (HUF) that realizes crypto gains or income during the financial year must declare it. Even occasional investors and part-time traders are not exempt. The ITD has specifically targeted non-reporting, imposing strict penalties and leveraging information reported by exchanges.

How Much Tax Do You Pay on Crypto in India?

India enforces one of the strictest crypto tax regimes in the world, characterized by a flat 30% rate on profits from VDAs. However, that isn’t the only obligation. Here’s a breakdown of how much tax you may owe:

The 30% Flat Rate

Since April 1, 2022, any profits from selling, trading, or spending VDAs—regardless of how long you held them—are taxed at a flat 30% rate. Unlike shares or equity, there is no distinction between long- and short-term capital gains. This means your profits from a day-trade or a multi-year investment are taxed identically.

The 1% TDS (Tax Deducted at Source)

In addition to the capital gains tax, India mandates a 1% TDS on the value of most crypto asset transfers when certain annual thresholds are met:

• RS50,000 per financial year for most individuals
• RS10,000 per financial year for certain users (e.g., those with lower overall income or trading via select platforms)

Indian exchanges usually deduct TDS automatically. For peer-to-peer or international transactions, the buyer is responsible for withholding TDS and remitting it to the government.

Tax on Crypto as Income

Some crypto activities are taxed at your personal income tax slab rate instead. Examples:

• Mining new coins
• Earning crypto via salary
• Receiving airdrops, staking, or DeFi rewards (upon receipt)

After receipt, any later disposal triggers the 30% tax on capital gains.

Crypto Tax Rate Table (FY 2024-25 / AY 2025-26)

Type of Crypto Income	Tax Rate	TDS Applies?	Offset Losses?
Profits from VDA transfers	30% (plus 4% cess)	Yes, 1%	No
Mining, staking, airdrops	Slab rate	No	N/A
Gifts (recipient, above threshold)	Slab rate	No	N/A
Business income (frequent trading)	At slab rate (business income)	Varies	N/A

Individual Income Tax Slabs (FY 2024-25 / AY 2025-26)

Income Slab (INR)	Tax Rate
Up to 3,00,000	0%
3,00,001 – 6,00,000	5% above 3,00,000
6,00,001 – 9,00,000	15,000 + 10% above 6,00,000
9,00,001 – 12,00,000	45,000 + 15% above 9,00,000
12,00,001 – 15,00,000	90,000 + 20% above 12,00,000
Above 15,00,000	1,50,000 + 30% above 15,00,000

Note: Surcharge and cess apply as applicable.

Worked Example

Suppose Rina buys 1 ETH for ₹180,000 and later sells it for ₹220,000. Her taxable gain is ₹40,000. She’ll owe:

• 30% of ₹40,000 = ₹12,000 (plus cess)
• 1% TDS = ₹2,200 (the exchange usually deducts this)

If Rina received 0.5 ETH from staking (worth ₹90,000 on the day she gets it), that’s treated as regular income for that year and taxed per her income tax slab, regardless of when (or if) she sells the coins.

Can the Income Tax Department Track Crypto?

Growing Regulatory Surveillance

The Indian ITD has become highly effective at tracking crypto transactions by leveraging strict KYC (Know Your Customer) requirements enforced on Indian exchanges. In addition, the mandatory 1% TDS on every qualifying transaction and the introduction of dedicated sections in the annual Income Tax Return (ITR)—namely, Schedule VDA—make it increasingly difficult to conceal crypto gains.

How ITD Tracks Crypto

• KYC Reports: All regulated exchanges collect and share customer information.
• TDS Data: Every 1% TDS transaction is linked to PAN/Aadhaar and reported to ITD.
• Exchange Compliance: Multiple high-profile probes have recovered vast sums in GST and unpaid tax, spotlighting government scrutiny.
• International Cooperation: Cross-border data sharing is increasing.

Consequences of Non-Disclosure

Failure to report crypto-related income can lead to severe consequences, including:

• Fines of up to 200% of tax avoided
• Imprisonment between 3 months to 7 years
• Additional financial penalties and audits

Real-World Enforcement

By 2024, ITD investigations into 17 crypto exchanges uncovered billions in unpaid GST. Enforcement is aggressive, with new amendments facilitating faster, more granular reporting and cross-matching of crypto transactions with individual returns.

How Is Crypto Taxed in India?

The country’s crypto tax system is codified in several key sections:

Core Legal Provisions

• Section 2(47A): Defines what constitutes a Virtual Digital Asset (VDA), covering cryptocurrencies, NFTs, and many tokens.
• Section 115BBH: Levies a flat 30% tax (plus cess/surcharge) on all income from VDAs, with no distinction between short- and long-term holding periods.
• Section 194S: Requires a 1% TDS on all qualifying crypto asset transfers above annual thresholds.

Types of Taxable Events and Their Treatment

Here’s a structured comparison of how different scenarios are taxed:

Scenario	When Taxed	Tax Rate	Notes
Selling crypto for fiat	On sale	30% of gain + 1% TDS	Cost basis = purchase price
Trading crypto for crypto	On trade	30% of gain + 1% TDS	Value determined in INR on trade date
Spending crypto	On payment	30% of gain	Gain = Market value – cost basis
Gifting crypto	On transfer (giver); On receipt (recipient)	30% of gain (giver), slab rate (recipient)	Gifts under ₹50,000/yr tax-free
Mining/staking/airdrop	On receipt	Slab-rate income tax	FMV in INR on receipt
DeFi earnings	On receipt	Slab-rate income tax	If swapped/spent, later taxed at 30%
Holding/moving between wallets	Never	0%	Not a taxable event

Technical Terms Explained

What is the Cost Basis?

The “cost basis” is the original purchase price (in INR) or fair market value at receipt. Only this can be deducted from your sale price to calculate taxable gain. Transaction fees, trading fees, gas fees, or other expenses are not currently deductible.

Cost Basis Calculation Methods

India allows use of both FIFO (First-In-First-Out) and average cost methods, though FIFO remains the industry standard. Accurate tracking is essential due to the inability to offset gains with losses.

Tax Treatment for Gifts

Crypto gifts face unique treatment:

• From close family (parents, spouse, siblings, lineal ancestors/descendants): Tax-free
• From non-family, under ₹50,000 per year: Tax-free
• Above ₹50,000 per year: Recipient pays income tax at slab rate

Valid Exemptions

Crypto assets are tax-free in these cases:

• Simply holding (HODLing) assets
• Transferring between your own wallets (no ownership change)
• Gifts or airdrops cumulatively under ₹50,000 in a year, or from close family

Tax Reporting and Compliance

From FY 2022-23, taxpayers must include a dedicated Schedule VDA section in their ITR. Most investors use:

• ITR-2: For capital gains from investment
• ITR-3: For business income from trading

Reporting Deadlines

Type of Filer	Deadline (FY 2024-25, AY 2025-26)
Standard (non-audited)	July 31, 2025
Audited	October 31, 2025
Belated return	December 31, 2025

India Income Tax Rate

The Indian tax system applies slab rates to most types of personal income, but crypto gains from VDAs are the exception—these are taxed at a flat rate.

2025 Personal Income Tax Slabs (New Regime, Individuals Below 60)

Annual Taxable Income (INR)	Tax Rate
Up to 3,00,000	0%
3,00,001 – 6,00,000	5%
6,00,001 – 9,00,000	10%
9,00,001 – 12,00,000	15%
12,00,001 – 15,00,000	20%
Above 15,00,000	30%

Application to Crypto Income

• 30% VDA gains tax supersedes slabs: All profits from trading, selling, or spending crypto assets face the flat 30% tax, not the personal slab.
• Crypto received as income: Mining, staking rewards, or airdrops are first taxed under normal slabs at the time of receipt; when later disposed, the 30% tax on capital gains applies.
• Gifts exceeding ₹50,000 (non-family): Recipients taxed at slab rate.

Example

Meera earns ₹400,000 from salary and ₹70,000 from an airdrop. She falls in the 5% slab for both. When she sells the airdropped crypto for a ₹30,000 gain, she’ll face a fresh 30% tax on that gain.

Crypto Losses in India

Indian crypto tax rules are unusually strict: losses from VDAs cannot be offset against any type of income, nor can they be carried forward to future years.

Implications of No Offsetting

• Selling BTC at a loss does not reduce taxes on ETH gains.
• Losses from crypto cannot offset stock market profits, business income, or other capital gains.
• Costs beyond cost of acquisition (e.g., trading fees, exchange fees) are also not deductible.

Examples

Scenario 1:
Vikas makes a ₹60,000 gain on Ethereum but loses ₹90,000 on Bitcoin in the same year. He must still pay 30% tax on the ₹60,000 gain. The BTC loss is simply disregarded for tax purposes.

Scenario 2:
Archana pays fueling and transaction fees worth ₹5,000 on her crypto trades. She cannot claim these costs as deductions—only the original buy price is considered for tax.

Treatment of Lost or Stolen Crypto

There is no explicit guidance yet, but based on Indian court precedents:

• Losses from lost, hacked, or stolen crypto are not tax-deductible.
• No capital gains taxes are owed on assets that are lost or stolen, but their value cannot reduce other taxable gains.

DeFi Tax

DeFi (Decentralized Finance) activity has exploded in India, but the tax rules remain rooted in traditional frameworks due to lack of definitive guidance from the ITD.

Taxation of Common DeFi Activities

• Participation income (yield farming, liquidity mining, staking, rewards):

– Taxed at slab rate as regular income at time of receipt, based on fair market value in INR.

• Redeeming/Selling those assets:

– 30% VDA gains tax applied on any additional appreciation at disposal.

DeFi Activity Taxation Table

DeFi Activity	Tax on Receipt	Tax on Disposal (Sale/Swap)
Liquidity mining rewards	Slab rate (income)	30% on profits
Staking/lending rewards	Slab rate (income)	30% on profits
Yield farming, play-to-earn, etc.	Slab rate (income)	30% on profits
Buying/selling DeFi tokens	N/A	30% on profits (as VDA)

Example: DeFi in Practice

Raj deposits ₹100,000 of USDT in a DeFi lending pool and receives ₹10,000 in reward tokens. At receipt, this ₹10,000 is taxed according to his slab. Later, when he swaps those tokens for ₹15,000, he pays 30% tax on the ₹5,000 gain.

International Protocols

Indian residents engaging with DeFi protocols outside India are still required to self-assess and pay taxes, even if the foreign platform does not deduct TDS or report the activity.

Natural Integration: WEEX Exchange and WEEX Tax Calculator

As Indian investors adapt to the evolving regulatory landscape, choosing a reliable and innovative crypto exchange is more important than ever. WEEX Exchange stands out for its commitment to transparency, compliance, and user empowerment, making it a trusted platform for traders and investors in India and beyond. Whether you are actively trading, investing for the long term, or exploring the world of DeFi and NFTs, WEEX provides a robust and secure environment to manage your virtual digital assets.

Navigating the complexities of crypto taxation can be overwhelming, especially with India’s strict requirements. That is why WEEX offers an integrated Tax Calculator to help users estimate and prepare for their tax liabilities before filing. By using the WEEX Tax Calculator, you can enter your trades, track your realized gains, and see your projected tax responsibilities under Indian law.
Disclaimer: The WEEX Tax Calculator is a tool for informational purposes only and should not substitute for professional tax advice. Always consult with a qualified tax advisor for compliance.
Explore the calculator at [https://www.weex.com/tokens/bitcoin/tax-calculator](https://www.weex.com/tokens/bitcoin/tax-calculator).

Frequently Asked Questions (FAQs)

What cryptocurrencies are subject to tax in India?

In India, all virtual digital assets—including Bitcoin, Ethereum, stablecoins, NFTs, and most altcoins—are subject to tax if they are sold, traded, gifted, received as income, or spent. The tax applies regardless of whether the crypto is held on a local or international exchange.

How do I calculate my crypto tax liability?

Calculate your tax by subtracting your cost basis (purchase price in INR) from your sale price for each taxable event. Profits from selling, swapping, or spending crypto are taxed at a flat 30%. For crypto received via mining, airdrops, or staking, use the fair market value in INR at the time the asset was received and apply your personal slab rate. Later disposal triggers additional 30% capital gains tax.

What records should I keep for crypto taxes?

Maintain detailed records of each transaction, including:

• Dates of purchase and sale/transfer
• Number and type of coins/tokens
• Amounts received or paid
• Purchase and sale prices in INR (with conversion rates if acquired/sold in foreign currency)
• Transaction fees (for reference, though only cost of acquisition is deductible)
• Documented source and destination addresses for wallet transfers
• Records for mining/staking/airdrops (including fair market value on receipt)

These records support your tax filings and are critical in the event of an audit.

When are crypto taxes due in India?

Crypto taxes are due in line with regular income tax deadlines. For FY 2024-25 (AY 2025-26), the return for non-audited individuals must be filed by July 31, 2025. Audited taxpayers have until October 31, 2025, and belated returns must be filed no later than December 31, 2025.

What happens if I don’t report crypto taxes?

Failure to report crypto income or pay required taxes can lead to severe penalties, including fines up to 200% of the tax due, imprisonment (3 months to 7 years), and substantial interest on delayed payments. The ITD cross-verifies data reported by exchanges and through TDS, so evasion is increasingly difficult and risky.

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For Indian crypto investors in 2025, proactive compliance is more important than ever. With transparent reporting, recordkeeping, and the right tools—from the WEEX Exchange to the WEEX Tax Calculator—you can trade with confidence and peace of mind in the country’s evolving digital asset landscape.