India taxes Virtual Digital Assets at a flat 30% with no loss offsets or deductions. Learn how TDS, reporting rules, and new 2025 changes affect your crypto investments.
VDAs Tax India: What You Need to Know About Crypto Tax Rules in India
When you buy or sell Virtual Digital Assets, digital assets like Bitcoin, Ethereum, and other tokens that are not legal tender but are treated as property for tax purposes. Also known as cryptocurrencies, they are subject to strict tax rules in India under the VDAs tax India framework. Since 2022, the Indian government has treated all crypto transactions as taxable events, regardless of whether you made a profit or not. This isn’t just about trading—it includes gifting, swapping tokens, and even earning rewards from staking or yield farming.
The 30% tax on VDAs, a flat tax rate applied to all gains from the transfer of virtual digital assets in India is one of the highest in the world. Unlike traditional investments, you can’t offset losses against other income. If you bought ETH for ₹50,000 and sold it for ₹70,000, you pay ₹6,000 in tax—even if you lost money on another trade. The 1% TDS, a tax deducted at source on every crypto transaction above ₹10,000 in a single day adds another layer. Exchanges like WazirX and CoinDCX automatically withhold this, but if you trade on a DEX or peer-to-peer, it’s still your responsibility to track and pay.
Many people assume that holding crypto without selling avoids tax, but that’s not true. If you receive crypto as a gift, airdrop, or reward, it’s taxed as income at the time you receive it. The value is based on the market price in INR on that day. Even if you never sell, you owe tax on the gain. And if you move crypto between wallets or exchanges? That’s a taxable transfer too. The Income Tax Department has access to on-chain data through exchange reporting and third-party analytics tools. They’re not guessing—they’re tracking.
There’s no exemption for small traders, no threshold below which you’re safe, and no special treatment for long-term holders. The rules apply equally to someone with ₹10,000 in crypto and someone with ₹1 crore. The only way to avoid penalties is to keep clear records: dates, amounts, values in INR, and transaction IDs. Use a simple spreadsheet or a crypto tax tool that supports Indian regulations. Filing your ITR with crypto income isn’t optional—it’s mandatory. Missing it could mean fines, interest, or worse.
What you’ll find below are real-world breakdowns of how Indian crypto users are navigating these rules. From how Binance users handle TDS to why airdrops like WMX or VDR still trigger tax liability, these posts cut through the noise. You’ll see what actually gets taxed, how to calculate it without an accountant, and where people are getting tripped up—even smart ones. No theory. No fluff. Just what works under India’s current crypto tax law.
