Taxes · 🇮🇳 India
Crypto and tokenized asset taxes in India
Gains on virtual digital assets are taxed at a flat 30% plus 4% cess, with no loss set-off, and 1% TDS on transfers; the Income-tax Act 2025 kept this from 1 April 2026.
Crypto
Gains
30% flat + 4% cess (plus surcharge on high incomes); 1% TDS on transfers
Tax-free allowance
No basic exemption against VDA gains; only cost of acquisition is deductible.
Losses
VDA losses cannot offset any other income or other VDA gains and cannot be carried forward.
Also
Old law: section 115BBH (30%) and section 194S (1% TDS) of the 1961 Act. From 1 April 2026 the Income-tax Act 2025 carries both over; TDS now sits in section 393(1), Table Sl. No. 8(vi), at 1% (20% without PAN). VDAs received as gifts are taxed in the hands of the recipient.
Income and tokenized assets
Staking, lending, yield
Staking, lending and DeFi rewards are generally taxed as income at slab rates when received (no specific CBDT circular); the later sale is taxed at 30%. Airdrops are taxed on receipt as income or gift; no specific guidance on yield-bearing stablecoins.
Tokenized stocks, bonds, funds
No specific guidance. A tokenized stock or tracker certificate bought as a crypto token likely falls within the broad VDA definition (30%, no loss set-off). Foreign shares and ETFs held directly through a foreign or GIFT City broker are taxed as normal capital assets: over 24 months 12.5% long-term, otherwise slab rates; foreign dividends at slab rates with credit for foreign withholding. No official statement on tokenized units issued in GIFT City IFSC.
Tokenized gold
No specific guidance; a gold token held as a crypto token is likely a VDA (30%).
Filing
Tax year
1 April – 31 March ('tax year' under the Income-tax Act 2025); return due 31 July (individuals, non-audit)
Reporting
Report VDA gains in Schedule VDA of the ITR; all foreign assets (including foreign exchange accounts and wallets abroad) in Schedule FA. Exchanges deduct 1% TDS (thresholds INR 50,000 for specified individuals/HUFs, INR 10,000 for others; on P2P trades the buyer deducts). Remittances under LRS above INR 10 lakh a year attract 20% TCS, creditable in the return.
Tax authority
Watch out
- Losses on one coin cannot offset gains on another coin.
- Section numbers changed on 1 April 2026; old guides still quote 115BBH and 194S.
- Buying tokens on a foreign exchange still needs TDS and Schedule FA disclosure.
- Tokenized versions of shares may be taxed far harsher than the shares themselves.
Sources
- Income Tax Department: Taxation of VDA · incometaxindia.gov.in
- Taxscan: VDAs under Income Tax Act 2025 · taxscan.in
- SAG Infotech: TDS on VDA u/s 393(1) · blog.saginfotech.com
- CAclubindia: TDS on VDA under ITA 2025 · caclubindia.com
- Motilal Oswal: tax on US stocks · motilaloswal.com
- Mondaq: Asset Tokenisation Bill 2026 and VDA overlap · webiis10.mondaq.com
Not confirmed
- Exact section number for the 30% rate under the Income-tax Act 2025 (sources differ).
- Tax treatment of tokenized securities and GIFT City tokenized units: no CBDT guidance found.
- Section 509 crypto-asset reporting (CARF) start date not confirmed from an official source.
- Existing summary (29 Oct) is correct.
Researched 2026-11-01 for private individuals resident in India. Information, not tax advice — rules change; check the tax authority before you file.