Cryptocurrency and Virtual Digital Asset (VDA) taxation in India became a defined regulatory reality from Financial Year 2022-23, with the introduction of Section 115BBH (flat 30% tax on VDA income), Section 194S (1% TDS on VDA transfers above ₹50,000 / ₹10,000), and the mandatory Schedule VDA in ITR. Whether you are a retail crypto investor, an active trader on Indian or foreign exchanges, a DeFi participant, an NFT creator or buyer, a crypto miner, a Web3 startup, a blockchain business, or an institutional fund — your cryptocurrency gains, income, and transactions in India are now squarely within the income tax net, with the Income Tax Department actively using AIS / TIS, exchange data, and blockchain analytics to identify non-compliance.
Our crypto consulting team provides end-to-end advisory covering VDA income computation and ITR filing with Schedule VDA, Sec 115BBH tax planning (no loss set-off, no carry-forward, no deductions except cost of acquisition), Sec 194S TDS compliance for exchange operators and peer-to-peer traders, GST on crypto services, FEMA / RBI compliance for overseas exchange holdings and remittances, NFT and DeFi income classification, Web3 business structuring, crypto fund setup, tokenomics advisory, PMLA / FIU-IND compliance for VASPs, and international crypto tax treaties for NRIs and global investors. We bridge the gap between blockchain technology and Indian law.
30% flat tax on profits from sale / transfer of any VDA; no set-off against other income; no loss carry-forward; no deductions except cost of acquisition; Schedule VDA in ITR-2 / ITR-3.
1% TDS on VDA transfer above ₹50,000 (₹10,000 for specified persons); exchange operators deduct at source; P2P traders must deduct; Form 26QE / 26Q reporting; ITNS 281 deposit.
Staking rewards, liquidity mining, yield farming, airdrops, hard forks — income classification (capital gains vs business income vs other sources); VDA tax applicability; AIS matching.
NFT minting cost, sale proceeds — VDA Sec 115BBH or business income depending on frequency; royalty income from NFT resale under Sec 194-O / 194Q; GST on NFT services; creator vs collector treatment.
Mining rewards — business income (recurring) or other sources (occasional); deduction for electricity, hardware, depreciation; GST registration for mining services; FEMA for overseas pool income.
Entity structuring for Web3 startups — Pvt Ltd vs LLP vs offshore; token issuance (ICO / IDO) regulatory framework; DPIIT Startup India recognition; VC funding, SAFTs, convertible notes; FEMA ODI / FDI.
Holding crypto on foreign exchanges — LRS remittance limits, Schedule FA (Foreign Assets) disclosure in ITR, FEMA compounding for violations, overseas VDA investment rules, repatriation advisory.
Virtual Asset Service Provider registration with FIU-IND; AML / KYC policy drafting; CTR / STR reporting obligations; PMLA compliance framework; RBI / SEBI engagement strategy for exchanges and custodians.
Virtual Digital Asset — any information, code, number, or token generated through cryptographic means; includes cryptocurrency, NFTs, tokens; excludes gift cards, foreign currency, and CBDC.
All VDA gains taxed at 30% (+ 4% cess + applicable surcharge) regardless of holding period; no basic exemption benefit; no deduction except cost of acquisition; loss from VDA cannot set off any income.
1% TDS on consideration for VDA transfer; threshold ₹50,000 (₹10,000 for specified persons); exchange operators deduct automatically; P2P traders self-deduct; Form 26QE for self-deduction.
All VDA transactions — buy, sell, swap, gifts received, staking rewards — must be disclosed in Schedule VDA in ITR-2 (salaried) or ITR-3 (business); date-wise, exchange-wise breakup required.
Loss from one VDA cannot be set off against profit from another VDA, or against any other head of income; losses also cannot be carried forward to future years — unique restriction under Sec 115BBH.
VDA received as gift from non-relative above ₹50,000 — taxable as "other sources" at slab rate; from "relative" — exempt; subsequent sale taxed at 30% under Sec 115BBH with giftor's cost as base.
CBDT receives VDA transaction data from Indian exchanges (WazirX, CoinDCX, Zebpay, etc.) which reflects in AIS / TIS; non-disclosure or mismatch triggers automated notice; foreign exchange data via CRS/FATCA.
Swapping one cryptocurrency for another (e.g., BTC to ETH) is treated as a "transfer" and is a taxable event under Sec 115BBH; fair market value of asset received is the sale consideration.
Exchange services — 18% GST on trading fees; crypto consulting / advisory — 18% GST; mining services — potentially taxable; NFT marketplace fees — 18% GST; cross-border crypto services — LUT / zero-rated.
Crypto held on foreign exchanges (Binance, Kraken, Coinbase) must be disclosed in Schedule FA (Foreign Assets) in ITR; non-disclosure = Black Money Act violation with steep penalties and prosecution risk.
| Transaction / Income Type | Tax Provision | Tax Rate | Key Rule / Note |
|---|---|---|---|
| Sale / Transfer of Crypto / NFT | Sec 115BBH | 30% + 4% cess | No deduction except cost; no set-off; no carry-forward |
| TDS on Crypto Purchase / Transfer | Sec 194S | 1% TDS | Threshold ₹50K (₹10K specified); Form 26QE for P2P |
| Crypto Received as Gift (non-relative) | Sec 56(2)(x) | Slab rate (other sources) | If > ₹50K from non-relative; relative gifts fully exempt |
| Staking / Mining / Airdrop Rewards | Sec 115BBH / PGBP | 30% or slab rate | Classification depends on nature; FMV at receipt as income |
| Crypto Swap (BTC → ETH) | Sec 115BBH | 30% on gain | Treated as transfer; FMV of received coin = consideration |
| NFT Sale by Creator (frequent) | PGBP / Sec 115BBH | Slab / 30% | Business income if regular; VDA if occasional investor |
| Foreign Crypto Exchange Holding | Schedule FA + FEMA | Penalty if undisclosed | Black Money Act: ₹10L+ penalty; must disclose in ITR |
| GST on Crypto Exchange Fees | CGST Act | 18% GST | On trading fees, platform fees, advisory charges |
| Crypto Business – Company / LLP | Sec 115BAA / Normal | 22% / 25–30% | Business income rules; Sec 115BBH applies to non-business VDA |
Trade-by-trade P&L computation from exchange statements, Schedule VDA preparation, ITR-2 / ITR-3 filing; AIS / TIS reconciliation; TDS credit matching under Sec 194S.
Advance tax planning on VDA gains; gain vs loss positioning; cost of acquisition optimisation; timing of sale planning; regime interaction; multi-year crypto tax strategy.
1% TDS advisory for exchanges, P2P traders, and crypto businesses; Form 26QE preparation; ITNS 281 deposit calendar; 26Q quarterly return inclusion; TRACES compliance setup.
Income classification for staking rewards, liquidity mining, yield farming, airdrops, and hard forks; ITR disclosure strategy; AIS / TIS reconciliation for on-chain income.
NFT minting cost treatment, creator vs investor classification, royalty income reporting, marketplace TDS compliance, GST on NFT services, platform fee deductibility.
Mining income classification (business / other sources), hardware depreciation, electricity cost deduction, ITR-3 Schedule BP filing, GST registration and returns for mining entities.
Entity setup for Web3 startups — Pvt Ltd / LLP / offshore; token issuance framework; DPIIT Startup India recognition; VC / SAFT structuring; FEMA FDI / ODI advisory.
LRS remittance for overseas crypto investment, Schedule FA / FSI disclosure in ITR, FEMA violation compounding, repatriation of crypto proceeds, RBI TCS on LRS advisory.
FIU-IND VASP registration, AML / KYC policy drafting, CTR / STR reporting framework, PMLA compliance audit, internal controls for crypto exchanges and custodians.
18% GST on exchange fees, advisory services, token sale classification, NFT marketplace GST, LUT for export of crypto services, GST audit and return filing for Web3 entities.
Residential status determination, RNOR window for returning Indians, tax treaty (DTAA) analysis on crypto income, foreign account / exchange disclosure, Schedule FA / CRS / FATCA compliance.
IT Department crypto notice response (Sec 133(6) / 148 / 142(1)), AIS mismatch rectification, reassessment defence, penalty mitigation under Sec 270A, voluntary disclosure strategy.
If you traded, staked, or received crypto during the year, Schedule VDA disclosure in ITR is mandatory — non-filing or wrong disclosure risks notices and penalties.
CBDT is issuing notices based on exchange data in AIS — Sec 133(6) / 148 notices for non-disclosure; immediate expert response and voluntary disclosure required.
Gains above ₹50,000 from VDA, advance tax planning, and correct P&L computation from multiple exchanges and wallets — professional crypto CA advisory essential.
Binance, Kraken, Coinbase, Bybit holdings must be disclosed in Schedule FA; LRS limits, FEMA compliance, and Black Money Act exposure — urgent advisory needed.
Entity structuring, token issuance compliance, VASP registration, PMLA / FIU obligations, GST registration, DPIIT Startup recognition — expert Web3 advisory from Day 1.
Sec 194S TDS deduction, FIU-IND VASP registration, AML / KYC compliance, PMLA obligations, GST on fees, ITR filing for the entity — full regulatory compliance suite required.
On-chain income from staking, yield farming, NFT sales, mining rewards — complex income classification, AIS reconciliation, and ITR disclosure require specialist crypto tax knowledge.
RNOR window planning, residential status determination, DTAA analysis on crypto gains, Schedule FA carry-forward, repatriation strategy — specialised NRI crypto advisory required.
Collect all exchange statements, wallet history, DeFi logs, and NFT records; identify all taxable events across Indian and foreign platforms.
Trade-by-trade gain / loss calculation using FIFO / LIFO / weighted average; VDA-wise breakup; AIS / TIS cross-matching; TDS credit verification.
Advance tax planning, Schedule FA / VDA disclosure strategy, FEMA / LRS compliance review, VASP obligations, GST applicability assessment.
Schedule VDA preparation, ITR-2 / ITR-3 filing, GST return filing, TDS return (26Q / 26QE), FEMA compounding if required, voluntary disclosure filing.
Quarterly TDS / GST calendar, AIS monitoring, advance tax schedule, notice watch, annual ITR refresh, crypto regulatory update advisory.
Partner with our crypto consulting experts for end-to-end VDA tax computation, Schedule VDA ITR filing, Sec 194S TDS compliance, DeFi / NFT / staking advisory, FEMA / Schedule FA disclosure, Web3 business structuring, VASP registration, and year-round crypto regulatory advisory.
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