VDA Crypto Tax Under explained: this guide covers what VDA Crypto Tax Under 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.
1. VDA Defined
Virtual Digital Assets (VDAs) include all cryptocurrencies (Bitcoin, Ethereum, BNB, Solana etc.), NFTs (Non-Fungible Tokens), and any other digital assets defined by the government under ITA 2025. The definition is broad and technology-neutral — covering both current and future digital asset types.
2. Tax Rate: 30% Flat on All VDA Gains
Section 67A imposes 30% tax + 4% cess = 31.2% effective rate on all VDA income. Key features of this rate:
- No distinction between short-term and long-term holding — all gains taxed at 30%
- Section 157 rebate (zero tax up to Rs 12L) does NOT apply to VDA income — tax from the first rupee
- No deduction allowed except cost of acquisition
- No loss from one VDA can offset gain from another
- No carry-forward of VDA losses
3. What Triggers VDA Tax
| Transaction | Taxable Event? | Basis of Tax |
|---|---|---|
| Sale of crypto for INR | Yes | 30% on (sale price minus cost) |
| Crypto-to-crypto swap | Yes | 30% on (FMV of received asset minus cost) |
| NFT sale | Yes | 30% on gain |
| Staking rewards received | Yes | 30% on FMV at time of receipt |
| Mining income | Yes | 30% on FMV at time of mining |
| Airdrop received | Yes | 30% on FMV at receipt |
| Holding (no sale) | No | No taxable event |
4. TDS Under Section 67B
When any person pays consideration for transfer of a VDA exceeding Rs 10,000 (Rs 50,000 for specified persons), TDS at 1% must be deducted under Section 67B. Indian exchanges deduct TDS automatically on each sell transaction. For peer-to-peer trades, the buyer deducts and deposits TDS. The TDS (1% of sell consideration) appears in the seller Form 26AS as a credit — offsetting their 30% tax liability.
5. Cost of Acquisition for Crypto Received as Salary/Gift
If crypto was received as salary, the FMV at the time of receipt is the cost of acquisition (the salary amount already taxed as perquisite under Section 17(2)). If received as a gift from a non-relative and taxed as Other Sources income (above Rs 50K threshold), that FMV is the cost. This prevents double taxation when the same crypto is later sold.
6. Reporting in ITR
VDA income must be reported in Schedule VDA in ITR-2 or ITR-3. Each transaction must be entered: type of VDA, date of acquisition, cost, date of transfer, sale consideration, and gain. Aggregate all transactions from all exchanges (Indian and foreign). International exchange transactions must also appear in Schedule FA (foreign assets). AIS now shows VDA TDS credits — mismatch triggers notices.
7. Why TaxClue
Active crypto traders with hundreds of transactions need systematic capital gains computation. TaxClue reconciles exchange statements, computes Schedule VDA, and files ITR accurately. Contact us for crypto tax under ITA 2025.