What counts as a virtual digital asset
A virtual digital asset (VDA) is, in broad terms, any information, code, number or token generated through cryptographic means, including a crypto-asset: a digital representation of value that relies on a cryptographically secured distributed ledger. Bitcoin, Ether, other tokens and NFTs fall within it.
The definition is in section 2(47A) of the Income-tax Act, 1961. Indian rupees and foreign currency are not VDAs. The tax rules below apply whether you bought on an Indian exchange, a foreign exchange or a self-custody wallet.
How crypto is taxed for FY 2025-26
Income from transferring a VDA is taxed at a flat 30%, plus surcharge and cess, under section 115BBH. The rate does not depend on your slab or on how long you held the asset.
Three rules make crypto different from shares:
- Only cost of acquisition is deductible. No deduction for exchange fees, gas fees, internet, software or any other expense.
- No set-off of losses. A loss on one VDA cannot reduce a gain on another VDA, or any other income such as salary, business or share gains.
- No carry-forward. A VDA loss cannot be carried to a later year.
The new-regime rebate that makes income up to ₹12 lakh tax-free does not cover income taxed at special rates, so 30% applies to your crypto gains even if your other income is small.
A worked example
Illustrative figures for FY 2025-26, for a resident individual trading on an Indian exchange:
| Transaction | Cost of acquisition | Sale value | Result |
|---|---|---|---|
| Bitcoin, sold for rupees | ₹2,00,000 | ₹3,00,000 | Gain ₹1,00,000 |
| Ether, sold for rupees | ₹1,50,000 | ₹1,00,000 | Loss ₹50,000 (ignored) |
| Exchange fees on both trades | ₹2,000 | Not deductible |
Taxable VDA income is ₹1,00,000, not ₹50,000, because the Ether loss cannot be set off. Tax is ₹30,000 plus cess, and surcharge if your total income is high enough.
The exchange would have deducted 1% TDS on the sale values: ₹3,000 on the Bitcoin sale and ₹1,000 on the Ether sale. That ₹4,000 is credited against your ₹30,000 tax in the return.
What counts as a transfer
A transfer is not only a sale for rupees. It includes an exchange, so swapping one token for another, or using crypto to pay for goods or services, is a transfer of the token you gave up.
Each transfer is computed separately, which is why an active trader can have thousands of lines. We use your exchange and wallet exports to build the transaction list, and we explain the cost method we use.
Gifts, airdrops, staking and mining
A VDA is "property" for the gift rules in section 56(2)(x). If the total value of gifts you receive in a year from people who are not relatives exceeds ₹50,000, it is taxed as your income. Gifts from relatives, such as a spouse, parent or sibling, are outside this rule.
Airdrops, staking rewards and mining raise questions about when income arises and what the cost is on a later sale. The Act does not set these out as clearly as it does sales, so we review them case by case and tell you, in writing, the position we take before we file.
1% TDS on crypto and how you get credit for it
When you sell or swap a VDA, the buyer or exchange deducts 1% TDS on the sale value under section 194S, for payments to a resident. TDS is on the value, not the gain, so it is deducted even when you make a loss.
No TDS applies if the payments in the year do not exceed ₹50,000, where the payer is a specified person, such as an individual or HUF without a business audit requirement, or ₹10,000 for other payers. On Indian exchanges, the exchange usually deducts and deposits the TDS.
The TDS shows in your Form 26AS and AIS against your PAN. In the return, it is credited against your total tax. If TDS is more than your tax, for example because most of your trades were at a loss, you claim the excess as a refund. That only works if you file. Where TDS falls short of the tax on your gains, see advance tax on crypto gains.
From 1 April 2026, TDS on VDA transfers falls under section 393(1) of the Income-tax Act, 2025. The challan-cum-statement that replaced Form 26QE is Form 141, and the quarterly statement that replaced Form 26QF is Form 142.
Reporting crypto in your ITR: Schedule VDA
Every VDA transfer is reported in Schedule VDA, "Income from transfer of Virtual Digital Assets". It is in ITR-2 and ITR-3 for individuals, but not in ITR-1 or ITR-4, so crypto income means you cannot use the simpler forms.
| Column in Schedule VDA | What goes in it |
|---|---|
| Date of acquisition | When you bought or received the asset |
| Date of transfer | When you sold, swapped or spent it |
| Head of income | Capital gains, or business income if you trade as a business |
| Cost of acquisition | What you paid; special instructions apply to gifted assets |
| Consideration received | Sale value |
| Income from transfer | Consideration minus cost; a loss is reported as nil |
Use ITR-2 if crypto is an investment and you have no business income. Use ITR-3 if you trade crypto as a business or have other business income. Either way the rate is 30%, but the choice of head must be consistent with how you actually deal.
TDS credits go in the tax-paid schedules, and any gift taxed under section 56(2)(x) goes in income from other sources.
Crypto on foreign exchanges and wallets
If you are resident and ordinarily resident, Schedule FA asks for foreign assets in your ITR, including custodial accounts and "any other capital asset" held outside India. The schedule does not name crypto.
Whether a balance on a foreign exchange belongs in Schedule FA depends on how the account is held. We look at your accounts and agree the reporting with you before filing. If you are a non-resident, Schedule FA does not apply, and TDS on payments to you follows the non-resident rules: see our NRI income tax return service.
How the department sees your crypto
The department already receives TDS data from exchanges, which appears in your Form 26AS and AIS. From 1 April 2026, crypto exchanges and other reporting entities must also report crypto-asset transactions to the department under section 285BAA, inserted by the Finance Act, 2025.
The CBDT has written to taxpayers whose exchange data showed VDA transactions that were not reported in their returns. If you receive an email, a mismatch intimation or a notice about crypto, reply within the time allowed. Our income tax notice reply service handles these.
Left crypto out of an earlier return?
You can still correct it. The route depends on the year and on whether you filed at all.
| Situation | Route | Deadline |
|---|---|---|
| FY 2025-26, not filed yet | Belated return | 31 December 2026 |
| FY 2025-26, filed without crypto | Revised return | 31 March 2027 |
| Earlier years, or the above deadlines missed | Updated return (ITR-U) | 48 months from the end of the assessment year |
An ITR-U carries additional tax of 25% to 70% of the tax and interest, depending on how late it is. It cannot report a loss or increase a refund. Correcting voluntarily costs less than waiting for a notice. See our revised and belated return service and ITR-U filing service.
Due dates for crypto income, AY 2026-27
Crypto investors with no business income had until 31 July 2026. If you trade crypto as a business and need no audit, the date was 31 August 2026.
Both have passed. You can file a belated return until 31 December 2026, with a late fee under section 234F of ₹1,000 if total income is up to ₹5 lakh, or ₹5,000 above that. Audit cases file by 31 October 2026. For the full table, see our income tax return filing page.
Income-tax Act, 1961 or 2025: what changes for crypto
Your FY 2025-26 crypto income is taxed and reported under the Income-tax Act, 1961. From Tax Year 2026-27, which began on 1 April 2026, the Income-tax Act, 2025 applies.
| Point | FY 2025-26 (AY 2026-27) | Tax Year 2026-27 |
|---|---|---|
| Law | Income-tax Act, 1961 | Income-tax Act, 2025 |
| Tax on VDA income | Section 115BBH, 30% | Special-rate taxation of VDA income continues under the 2025 Act |
| TDS on transfer | Section 194S, 1% | Section 393(1) |
| TDS forms | Form 26QE, 26QF | Form 141, Form 142 |
| Return | ITR-2 or ITR-3 with Schedule VDA | New forms, to be notified |
We map your Tax Year 2026-27 crypto to the new forms once they are notified. Until then, keep full records of every trade from 1 April 2026.
Documents we need
You send the exports; we build the transaction list and the computation.
- PAN, e-filing login and bank details
- Transaction history for FY 2025-26 from every exchange you used (CSV or the exchange's tax report)
- Wallet addresses for any self-custody wallets
- Records of gifts, airdrops, staking or mining rewards
- Bank statements showing rupee deposits to and withdrawals from exchanges
- Form 26AS and AIS (we download these with your consent)
- Other income documents: Form 16 (see ITR for salaried employees), capital gains statements, interest certificates
Crypto ITR filing fees
There is no government fee to file an income tax return. Our professional fee for a crypto ITR starts at ₹1,999.
| Fee | Amount |
|---|---|
| Regikart professional fee, crypto ITR | From ₹1,999 |
| Government fee for filing an ITR | No government fee |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 21 September 2026.
The final fee depends mainly on the number of exchanges, wallets and transactions, and whether you also have business income. We confirm it in writing before we start.
Late fee, interest and additional tax are not our fees. Any section 234F fee, interest or ITR-U additional tax is paid by you directly to the department.
How we file your crypto return
We usually file a crypto return in 3-5 working days once we have complete exports. That is our usual experience, not a legal limit; high-volume traders take longer.
- Collect. You send exchange and wallet exports; we download Form 26AS and AIS.
- Reconcile. We match every sale with its cost and every TDS entry with a trade, and flag gaps such as missing buy records or transfers between wallets.
- Compute. We build Schedule VDA, compute tax at 30%, apply TDS credit and prepare the rest of your return.
- File and verify. After your approval we file ITR-2 or ITR-3 and help you e-verify within 30 days.
Why Regikart for crypto tax
Regikart is a CA and CS firm serving 250+ clients from Kolkata (head office), Delhi and Bengaluru. Every crypto return is prepared and reviewed by a Chartered Accountant.
- Software output checked by a CA: tools produce a gains report; we check it against your TDS and bank records before it goes into Schedule VDA.
- Whole return, not just crypto: salary, shares and business income are filed in the same return. For large share or property gains, see our capital gains ITR service; for trading as a business, see business ITR filing.
- Positions in writing where the law is unsettled, such as airdrops and staking.
- Planning ahead: our tax planning service helps you keep records for Tax Year 2026-27.