Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The 30% flat tax
Every gain is taxed at 30% — you can’t reduce it with other expenses or set crypto losses against salary, business or even other crypto gains.
1% TDS
Section 194S deducts 1% on transfers above the limit, so the department tracks your trades. Confirm the current threshold.
The harsh edges, and the reporting
The crypto regime is deliberately strict, and three edges catch people out. First, no set-off: a loss on one coin can’t be set against a gain on another, let alone against salary or business income, and it can’t be carried forward — each gain is taxed on its own at 30%, with only the cost of acquisition deductible (not even exchange fees or interest). Second, the 1% TDS under Section 194S on transfers above the threshold means the department already has a trail of your trades, so under-reporting is easily caught; on Indian exchanges the platform deducts it, while peer-to-peer and foreign-exchange trades put the obligation on you. Third, the scope is wide — ‘virtual digital assets’ covers cryptocurrencies and NFTs, and receiving them (as payment, an airdrop or a gift above the limit) can be taxable too. Gains are reported in the Schedule VDA of the return, transaction by transaction. There’s no long-term concession and no basic-exemption shelter for the 30% rate. Because the tax is unforgiving and the data is visible to the department, the practical course is to keep a full record of every acquisition cost and disposal and report all of it. Confirm the current TDS threshold and rules.