How to File Crypto Tax in India

How to File Crypto Tax in India (2026 Guide)

Filing crypto tax in India in 2026 requires understanding flat tax rules, TDS obligations, and reporting requirements for the Income Tax Department (ITD). The Indian government taxes profits from all crypto transactions at a 30% flat rate, with additional surcharge and cess, and imposes 1% TDS on transfers of Virtual Digital Assets (VDAs) under Section 194S.

Unlike other asset classes, holding crypto long-term does not provide tax benefits, making accurate reporting essential.

How Crypto Is Taxed in India (2026)

1. Flat 30% Tax on Crypto Profits

Any profit from selling, trading, or disposing of crypto, including NFTs and tokens, is taxed at a 30% flat rate, plus applicable 4% health and education cess and surcharge depending on income.

• Example: If you sell Bitcoin or Ethereum, calculate
  Capital Gain = Sale Price − Cost Basis, then apply 30% tax to the gain.
• This rule applies regardless of whether the gains are short-term or long-term.

2. Tax Deducted at Source (TDS) on Transfers

India introduced 1% TDS on transfers of VDAs exceeding ₹50,000 per year under Section 194S.

• Crypto received as gifts or airdrops may also be taxable as income in certain cases.
• Exchanges must deduct TDS when users sell crypto on their platform.

3. Reporting Crypto Income

All crypto income must be reported under Income from Other Sources in your annual tax return.

There is no distinction between long-term and short-term capital gains for crypto under ITD rules.

4. Tracking by the Income Tax Department

The Income Tax Department (ITD) tracks crypto transactions through:

• KYC-compliant Indian exchanges
• Data-sharing with global exchanges and analytics tools
• Cross-checks to identify discrepancies between reported and actual holdings

Step-by-Step Instructions to File Crypto Tax in India

1. Gather All Transaction Records

Collect comprehensive records including:

• Dates of purchases and sales
• Purchase and sale prices in INR
• Transaction fees
• Wallet exports
• Airdrop, staking, or mining income

Maintaining accurate records ensures correct tax reporting.

2. Calculate Gains for Each Transaction

Cost Basis

The price at which crypto was originally acquired.

Disposal Amount

The price at which crypto was sold or traded.

Capital Gain Formula

Capital Gain = Disposal Amount − Cost Basis

Example Calculation

• Bought 3 BTC at ₹35,00,000 each, sold at ₹50,00,000
  Gain per BTC = ₹15,00,000 → Total Gain = ₹45,00,000
• Bought 2 ETH at ₹1,50,000 each, sold at ₹2,00,000
  Gain per ETH = ₹50,000 → Total Gain = ₹1,00,000

Total taxable gain = ₹46,00,000
Tax payable = 30% of ₹46,00,000

3. Convert All Values to INR

If you use foreign exchanges, convert all transactions to Indian Rupees (INR) using the exchange rate on the date of each transaction.

4. File Using Your Income Tax Return (ITR)

Follow these steps:

• Log in to MyAccount on the Income Tax Department portal
• Report crypto gains under Income from Other Sources
• Include TDS details if applicable
• Attach supporting documentation if required

5. Meet Filing Deadlines

• Standard filing deadline: 31 October 2026

Filing before the deadline helps avoid penalties and interest charges.

6. Retain Records

Keep all crypto-related records for at least six years, including:

• Wallet and exchange transaction logs
• Cost basis and transaction fees
• Income receipts (staking, mining, airdrops)
• TDS certificates

Common Mistakes to Avoid

1. Failing to report all crypto transactions
2. Ignoring TDS obligations on crypto transfers
3. Not converting foreign exchange transactions into INR accurately
4. Misclassifying crypto income under capital gains vs other sources
5. Missing the 31 October filing deadline
6. Losing supporting documentation

Avoiding these mistakes reduces audit risk and potential penalties.

How Kryptos Helps You File Crypto Tax in India

Kryptos simplifies crypto tax filing by:

• Automatically importing transactions from wallets and exchanges
• Calculating gains and tax liabilities at the 30% flat rate
• Tracking TDS deductions and transfers
• Converting foreign crypto transactions to INR accurately
• Generating ITD-ready reports for ITR filing
• Providing audit-ready documentation for regulatory compliance

Using automation reduces manual effort and calculation errors.

Frequently Asked Questions

1. Do I have to pay tax on all crypto gains in India?

Yes. All profits from crypto disposals are taxed at a 30% flat rate plus surcharge and cess.

2. Is staking or airdrop income taxable?

Yes. Staking rewards, mining income, and airdrops are treated as taxable income.

3. What about TDS on crypto transfers?

Transfers of crypto exceeding ₹50,000 per year are subject to 1% TDS, typically deducted by exchanges.

4. Can I offset crypto losses?

Currently, crypto losses cannot be set off against other income under Indian tax rules.

5. Do I need to report foreign crypto accounts?

Yes. All foreign exchange wallets and crypto holdings must be reported in INR when filing your tax return.

Conclusion

Filing crypto tax in India in 2026 requires careful tracking of all gains, income from staking and airdrops, TDS deductions, and accurate reporting in your Income Tax Return (ITR).

Using tools like Kryptos ensures accurate calculations, proper INR conversions, and ITD-compliant filings, helping reduce errors, audit risk, and manual effort.