In India, crypto profits are taxed at a flat 30% rate under Section 115BBH, plus 4% Health & Education Cess — regardless of your income slab or how long you held the asset. On top of that, every sale on an Indian exchange attracts 1% TDS (Tax Deducted at Source) under Section 194S, which counts as advance tax credit when you file your ITR.
- Tax rate: 30% flat on all crypto profits + 4% cess
- TDS: 1% deducted at source on every sale above ₹10,000
- No loss set-off: Crypto losses cannot offset crypto gains or any other income
- Only deduction allowed: Cost of acquisition (purchase price only)
- ITR form: ITR-2 or ITR-3 with Schedule VDA — not ITR-1
If you traded crypto in India during FY 2024-25, here is a full breakdown of how to calculate what you owe and how to file correctly.
The Big Picture: How India Taxes Crypto
Starting April 1, 2022, India introduced a dedicated tax framework for cryptocurrency and other digital assets. The law calls them "Virtual Digital Assets" (VDAs), and the relevant section is Section 115BBH of the Income Tax Act.
Here's what you need to remember:
- Flat 30% tax on all profits from transferring crypto — no matter your income slab
- 4% Health & Education Cess on top of the tax amount
- No deductions allowed except the cost of acquisition (what you paid to buy)
- No loss set-off — you can't offset crypto losses against crypto gains (or any other income)
- 1% TDS deducted at source on every sale above ₹10,000 (or ₹50,000 for specified persons)
That last point about losses is the one that stings the most. If you made ₹2,00,000 profit on Bitcoin but lost ₹1,50,000 on an altcoin, you're taxed on the full ₹2,00,000. The ₹1,50,000 loss? Gone. Can't use it anywhere.
Let's Do the Math: A Real Example
Meet Rajesh. He bought 0.5 BTC for ₹8,00,000 in September 2024. By January 2025, the price rallied and he sold his entire holding for ₹12,00,000.
Here's his tax calculation:
- Sale price: ₹12,00,000
- Cost of acquisition: ₹8,00,000
- Profit: ₹4,00,000
- Tax at 30%: ₹1,20,000
- Cess at 4%: ₹4,800
- Total tax payable: ₹1,24,800
Now, when Rajesh sold on an Indian exchange, 1% TDS was deducted — that's ₹12,000 (1% of ₹12,00,000). So his remaining tax after TDS credit is ₹1,12,800.
Pretty straightforward, right? Buy price subtracted from sell price, 30% tax, add cess, subtract TDS already paid.
What Counts as a "Transfer"?
The tax applies whenever you transfer a VDA. This includes:
- Selling crypto for INR on any exchange
- Trading one crypto for another (e.g., swapping ETH for SOL)
- Using crypto to buy goods or services
- Gifting crypto (the recipient pays tax if value exceeds ₹50,000)
Simply holding crypto or moving it between your own wallets does not trigger a taxable event. Buying crypto with INR is also not taxable — only selling or exchanging it is.
Cost of Acquisition: The Only Deduction You Get
Here's the thing — unlike business income where you can claim expenses, Section 115BBH is brutal. The only deduction allowed is the cost of acquisition. That means:
- Selling fees? Not deductible (buy-side fees form part of your cost of acquisition).
- Gas fees? Not deductible.
- Your internet bill or trading tools? Forget it.
- Transaction charges from exchanges? Nope.
The cost of acquisition is simply what you paid to acquire the crypto. If you bought 1 ETH for ₹1,50,000, that ₹1,50,000 is your cost of acquisition. Period.
Which ITR Form Do You Use?
If you have crypto income, you need to file either ITR-2 or ITR-3. You can't use ITR-1 (the simple salary form) anymore.
- ITR-2 — if your crypto income is purely from buying and selling (capital gains treatment)
- ITR-3 — if you also have business or professional income, or if you treat your trading as business income
Both forms include Schedule VDA, which is where you report each crypto transaction — date of transfer, date of acquisition, cost, sale value, and the resulting income.
Surcharge: When High Income Adds More Tax
If your total income (including crypto gains) exceeds certain thresholds, you'll pay a surcharge on top of the 30% tax. For VDA income, the maximum surcharge is capped at 15%.
So if your total income crosses ₹50 lakh, the calculation becomes: 30% tax + 15% surcharge on that tax + 4% cess on the total. That effective rate works out to about 35.8% — a meaningful jump from the base 31.2%.
Key Deadlines for FY 2024-25
For the financial year ending March 31, 2025:
- ITR filing deadline: July 31, 2025 (for non-audit cases)
- Advance tax: If your total crypto tax liability exceeds ₹10,000, you should have been paying advance tax in quarterly installments
- Revised return: Can be filed until December 31, 2025
Missing the July 31 deadline means a late filing fee of ₹5,000 (₹1,000 if income is below ₹5 lakh) plus interest on any unpaid tax.
Common Mistakes to Avoid
I've seen so many traders trip up on these:
- Not reporting crypto-to-crypto trades. If you swapped BTC for ETH, that's a taxable transfer. The fair market value of what you received is your sale price.
- Trying to offset losses. Even if you're sitting on huge losses from the 2022 crash, you can't use them to reduce your 2024-25 tax bill.
- Forgetting international exchange trades. Just because Binance or KuCoin didn't deduct TDS doesn't mean the income isn't taxable. You still owe 30%.
- Not matching AIS/26AS data. The tax department already has your TDS data. If you don't report the income that matches those TDS entries, expect a notice.
How CryptoITR Can Help
Calculating all of this manually — especially if you have hundreds of trades across multiple exchanges — is a nightmare. That's exactly why we built CryptoITR. Upload your trade reports, and we'll compute your tax liability using the correct FIFO method, account for TDS credits, and give you the numbers you need for Schedule VDA.
Your FY 2024-25 taxes are due by July 31, 2025. Don't wait until the last week. Get your trade reports downloaded, run them through the calculator, and file on time. Your future self will thank you.