Next dueIncome Tax
7 NOVTDS / TCS deposit · Deducted in Oct 2026in 15 days 21 NOVITR filing · Audit cases · AY 2026-27 · extended from 31 Octin 29 days 15 DECAdvance Tax · 3rd (75%) instalment · FY 2026-27in 53 days 31 DECBelated / revised ITR · AY 2026-27in 69 days 30 SEPTax Audit Report · Form 3CA/3CB · AY 2027-28in 342 days 30 OCTAOC-4 · Financial statements · FY 2025-26in 7 days 11 NOVGSTR-1 · Outward supplies · Oct 2026in 19 days 15 NOVPF & ESI · Contributions · Oct 2026in 23 days
All due dates
Capital Gains

Tax on Cryptocurrency and Virtual Digital Assets

Income from cryptocurrency and other Virtual Digital Assets (VDAs) is taxed under a special regime in India. Here is how it works.

Written byTax & Compliance Expert, TaxClue
Published
Updated
Reading time
4 min
Questions
4 answered
  • Medium Complexity
Topic
Capital Gains
Published
August 20, 2026
Last updated
Aug 20, 2026
Reading time
4 min
0:00
Last updated: August 2026Verified against: Government sources

Tax on Cryptocurrency and explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Income from cryptocurrency and other Virtual Digital Assets (VDAs) is taxed under a special regime in India. Here is how it works.

The tax rules

  • Gains from transfer of VDAs are taxed at a flat 30% (plus surcharge and cess)
  • No deduction is allowed except the cost of acquisition
  • Losses from VDAs cannot be set off against any income, nor carried forward
  • 1% TDS under Section 194S applies on VDA transfers above the threshold

What counts as a VDA

Cryptocurrencies, NFTs and other notified digital assets are treated as VDAs.

Compliance

Report VDA income in your ITR, and ensure the 1% TDS is deducted/collected on transactions as required.

Frequently Asked Questions

How is cryptocurrency taxed in India?

Gains from VDAs are taxed at a flat 30%, with no deductions except cost, and losses cannot be set off.

Is there TDS on crypto?

Yes — 1% TDS under Section 194S applies on VDA transfers above the threshold.

Can I set off crypto losses?

No — VDA losses cannot be set off against any income or carried forward.

Are NFTs taxed like crypto?

Yes — NFTs and other notified digital assets are treated as VDAs.

Need help with this?

TaxClue's CA/CS experts handle GST, income tax and compliance end-to-end — fully online, transparent pricing.

Talk to an expert →
Quick recapKey facts & short answers

Key Facts About Tax on Cryptocurrency and

  • Applies in: All states across India, under the relevant central law.
  • Mode: Mostly online via the official government portal.
  • Typical timeline: Ranges from a few days to a few weeks depending on the case.
  • Non-compliance: May attract penalties, interest or late fees.
  • Expert help: TaxClue completes the entire process end to end for you.

How is cryptocurrency taxed in India?

Gains from VDAs are taxed at a flat 30%, with no deductions except cost, and losses cannot be set off.

Is there TDS on crypto?

Yes — 1% TDS under Section 194S applies on VDA transfers above the threshold.

A revised return is a remedy, not an admission; use it when you find the error yourself.

— TaxClue Direct Tax Desk

Tax on Cryptocurrency and: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.

Related Services & Guides

Why This Matters

Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in capital gains are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.

Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines. Government portals now allow most applications and filings to be completed online, reducing paperwork and turnaround time. Keeping your PAN, registration certificates and board resolutions organised makes every subsequent filing faster. When in doubt, it is better to seek clarification early rather than risk a notice or a late-filing penalty later.

A clear understanding of the applicable law helps you make confident, well-informed business decisions. TaxClue's experts regularly assist businesses across India with end-to-end capital gains support at transparent, affordable pricing. Timely compliance also improves your credibility with banks, investors and government authorities. Reviewing your obligations with a professional at least once a year keeps your business audit-ready and stress-free.

Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in capital gains are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.

Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines.

Was this article helpful?
About the author
Vivek Sharma Tax & Compliance Expert at TaxClue
Updated:
Share WhatsAppLinkedInXTelegramFacebookEmail

Disclaimer: This article is for general informational purposes only and does not constitute professional tax, legal or financial advice. Laws, rates and due dates change and can vary by individual case — always verify with the relevant government source (e.g. mca.gov.in, incometax.gov.in) or consult a qualified professional before acting. TaxClue accepts no liability for decisions taken based on this content.

People also ask

Questions, answered

Short, direct answers to the 4 questions readers ask most on this topic.

Gains from VDAs are taxed at a flat 30%, with no deductions except cost, and losses cannot be set off.

Yes — 1% TDS under Section 194S applies on VDA transfers above the threshold.

No — VDA losses cannot be set off against any income or carried forward.

Yes — NFTs and other notified digital assets are treated as VDAs.

Readers' favourites

Most viewed articles

All articles →
  1. 01Variable Dearness Allowance (VDA) — Calculation Method2,149 reads
  2. 02GST State Code and Jurisdiction for West Bengal1,248 reads
  3. 03Accounting Entries under GST: Complete Journal Entry Guide with...1,121 reads
  4. 04Tax Comparison of All Business Structures in India — FY 2026-271,100 reads
  5. 05Shorter Notice for Board Meeting and General Meeting — Rules and...1,095 reads
  6. 06Manufacturing License for Drugs — Form 25/25F1,080 reads
  7. 07Tax Audit Due Date FY 2025-26 — Section 44AB1,023 reads
  8. 08Clause 40 of Form 3CD — Turnover, Gross Profit and Other Ratios946 reads
  9. 09Directors Report Format — Complete Template for Private Company 2026897 reads
  10. 10Insurance Claim Process & Settlement — IRDAI Guidelines 2026894 reads
Across topics

Related guides

All guides →
⚖
Labour ComplianceVariable Dearness Allowance (VDA) — Calculation Method2,149 reads
◉
State-wise GuidesGST State Code and Jurisdiction for West Bengal1,248 reads
§
Accounting Standards & BookkeepingAccounting Entries under GST: Complete Journal Entry Guide with...1,121 reads
₹
Income TaxTax Comparison of All Business Structures in India — FY 2026-271,100 reads
Drafting Shorter Notice for Board Meeting and General Meeting — Rules and...1,095 reads
⚕
Drugs & CosmeticsManufacturing License for Drugs — Form 25/25F1,080 reads
₹
Income TaxTax Audit Due Date FY 2025-26 — Section 44AB1,023 reads
₹
Income TaxClause 40 of Form 3CD — Turnover, Gross Profit and Other Ratios946 reads
▦
MCA ComplianceDirectors Report Format — Complete Template for Private Company 2026897 reads
☉
FEMAInsurance Claim Process & Settlement — IRDAI Guidelines 2026894 reads