Crypto/VDA tax under Section 115BBH.
Total tax (30% + cess)
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Gain
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1% TDS on sale (194S)
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Your breakdown
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The harshest tax regime in the Indian code
Crypto is taxed in India under Section 115BBH, introduced by the Finance Act 2022, and it is deliberately punishing. Gains on any Virtual Digital Asset, which covers cryptocurrencies, tokens, and NFTs, are taxed at a flat 30% plus the 4% health and education cess, an effective 31.2%, with no slab benefit. There is no basic exemption, no holding-period concession, and no distinction between short and long term. Whether you sold after two days or two years, the rate is the same. This calculator applies exactly that: gain times 30%, grossed up by the 4% cess.
The two rules that hurt the most
Beyond the high rate, two design choices make this regime genuinely unforgiving. First, the only deduction allowed against your sale proceeds is the cost of acquisition. You cannot deduct exchange fees, gas fees, advisory costs, or interest on money borrowed to buy. Second, and this is the one that ruins active traders, losses cannot be set off. A loss on one coin cannot reduce the gain on another, cannot offset any other income, and cannot be carried forward to a future year. So you can have a net-losing portfolio overall and still owe substantial tax on your individual winning trades.
Worked example: buying for ₹2,00,000, selling for ₹3,50,000
You bought a coin for ₹2,00,000 and sold it for ₹3,50,000. The gain is ₹1,50,000. Here is the full tax picture the calculator produces.
Note that the ₹3,500 TDS is computed on the full ₹3,50,000 sale value, not on the gain. It is not an extra tax; it is a prepayment you adjust against the ₹46,800 final liability.
The 1% TDS that surprises frequent traders
Section 194S layers a 1% TDS on the transfer of a VDA above the threshold (₹50,000 a year for specified persons, ₹10,000 otherwise). For an active trader this is brutal on cash flow, because the 1% is deducted on every sale value, not on profit. Churn the same ₹3.5 lakh ten times and you have had ₹35,000 locked up as TDS across the year, even if your net gain was modest. You do get it all back as credit against your final tax or as a refund, but it sits with the exchequer until you file. Indian exchanges deduct this automatically; if you trade peer-to-peer or on a foreign platform, the obligation to deduct and deposit can fall on you.
Where to report it and the schedule that catches people
Crypto gains go in Schedule VDA of your ITR, and from AY 2025-26 the form asks for transaction-level detail. You report under ITR-2 if you treat it as capital gains, or ITR-3 if you trade as a business. The Annual Information Statement now pulls exchange data, so undisclosed crypto activity is increasingly visible to the department. My honest take: the regime is designed to discourage speculative churning, and from a pure tax-efficiency standpoint it succeeds. If you do hold crypto, keep meticulous records of acquisition cost per lot, because that is the only number that will reduce your tax.
Is receiving crypto as a gift or airdrop taxed?
Yes. A VDA received as a gift is taxable in the recipient’s hands at fair market value (subject to the usual relative and ₹50,000 exemptions for gifts). Airdrops are taxed as income at receipt, and then any later gain on selling them is taxed again under 115BBH.
Does the 30% rate apply if my total income is below the exemption limit?
Yes, this is the sting. The flat 30% under 115BBH applies regardless of your total income. Even someone with no other income and total earnings below the basic exemption limit pays 30% on their crypto gain, because the special rate overrides the slab structure entirely.