A Bitcoin SIP in India is not taxed while you buy. Every purchase, whether ₹10 a day or ₹5,000 a month, is just a purchase. Tax arises only when you transfer the Bitcoin: sell it, swap it or spend it. At that point the gain is taxed at a flat 30% under section 115BBH, plus applicable surcharge and 4% cess, and 1% TDS can be deducted on the sale value.
The part that makes a SIP different is cost. Each buy in a plan is its own purchase with its own date, price and cost of acquisition. When you sell part of your holding, your gain depends on which purchases that sale is matched against. The law does not prescribe a matching method for virtual digital assets. First-in, first-out is common. Pick one with your CA and stay consistent.
How an SBP works
On Unocoin, a SIP is called a Systematic Buying Plan, or SBP. You choose a rupee amount from ₹10 and a frequency, daily, weekly or monthly, and the plan buys automatically. There is a 0% SBP fee. Unocoin describes it as India's first Bitcoin SIP.
We built it for a habit, not for a trade. Most people in India already understand SIPs from mutual funds: a fixed amount, on a schedule, without trying to guess the right day. That shape made sense for Bitcoin. If you want the full story, our Bitcoin SIP page explains how a plan works.
A plan does not remove risk. Bitcoin's price moves a lot, a plan can be worth less than what you put in, and crypto products are unregulated in India. It changes how you buy. It does not change what you are buying.
I want the tax side to be as plain as the plan. So here it is.
When tax applies: on sale, not on buying
Buying Bitcoin is not a taxable event. That is true for a single purchase and for 365 purchases. While your plan runs, there is nothing to pay and nothing to report as income.
Tax applies when you transfer. Three kinds of transfer matter for most people:
- Selling Bitcoin for rupees.
- Swapping Bitcoin for another crypto asset.
- Spending Bitcoin on goods or services.
For each one, your income is the sale value minus the cost of acquisition. Only the cost of acquisition is deductible. No other expense or allowance. And losses have no relief: a loss on one sale cannot be set off against a gain on another, or against any other income, and it cannot be carried forward.
Cost of acquisition across many buys
This is the question SIP holders actually get stuck on.
A weekly plan of ₹500 makes 52 separate purchases in a year. Each one has its own date, its own price and its own cost. After two years you have more than a hundred lots of Bitcoin, all bought at different prices.
Now say you sell a small part. Which purchases did you sell?
The law does not set a matching method for VDAs. Many tax tools and advisers use first-in, first-out, or FIFO: the earliest coins you bought are treated as the first ones sold. Your CA may use FIFO or another method. What matters most is that you agree on one and apply it every year.
A small illustration with round numbers. Say your plan bought ₹500 of Bitcoin every week for a year, and each buy got a different amount of Bitcoin. Under FIFO, if you sell an amount equal to the first ten weeks of buys, your cost is the ₹5,000 those ten buys cost you. Your income is whatever you sold it for, minus that ₹5,000. If the sale brings ₹6,000, your VDA income is ₹1,000, taxed at 30% plus cess.
Whether the trading fee counts toward cost is a point to confirm with your CA. With SBP trades on Unocoin at a 0% SBP fee, that question is smaller than it would be on a plan that charges a fee on every buy.
1% TDS on sales
TDS on VDAs comes from section 194S (now covered under section 393 of the Income-tax Act, 2025). The payer deducts 1% of the consideration paid to a resident for the transfer of a VDA.
For a SIP holder, two points:
- No TDS on your buys. When you buy, you are not transferring a VDA to anyone. TDS applies to the transfer, which is the sale.
- TDS on the sale value, not the profit. When you sell, 1% of the sale value can be deducted, even if you made a loss on that sale.
There are thresholds. No TDS applies if the total consideration in a financial year does not exceed ₹50,000 where the payer is a "specified person", or ₹10,000 for any other payer. On an exchange, the platform typically handles the deduction.
TDS is not an extra tax. It is credited to your PAN, shows in Form 26AS and your AIS, and counts toward the tax you owe. Claim it in the tax-paid section of your return so it is credited. Our TDS guide has the detail.
Pausing, stopping or switching a plan
People ask whether changing their plan creates tax. A few common cases:
- Pausing or stopping a plan: no tax. You stop buying. You still own what you bought, at the cost you paid.
- Changing the amount or frequency: no tax. Future buys simply happen at the new amount.
- Swapping your Bitcoin for another crypto asset: that is a transfer, and taxed like a sale.
- Selling part to raise cash: a transfer. 30% on the gain, 1% TDS on the sale value, subject to thresholds.
- Moving your Bitcoin to your own wallet: commonly viewed as not a sale, but there is no specific ruling. Keep the withdrawal records with your SBP statements. See our self-custody and tax page.
- Giving some to a family member: gifts have their own rules, and gifts from specified relatives are exempt for the receiver. See the gifting page.
The pattern is simple. Buying and holding never creates tax. Anything that ends with you no longer owning the Bitcoin, in exchange for something, usually does.
Records your statements give you
The beauty of a plan is that the record-keeping is mostly done for you, as long as you save it.
Keep the full statement of every SBP purchase with its date and rupee amount. Keep your sale records with date, value and TDS. If you ever move part of your holding to your own wallet, keep the withdrawal transaction ID with the purchase records for those coins, so your cost can still be shown years later.
At filing time, every sale goes in Schedule VDA in ITR-2 or ITR-3, with date acquired, date transferred, cost, sale value and income. ITR-1 cannot be used if you have VDA income.
One more thing the rule suggests. Because losses are not deductible and each sale is taxed on its own, frequent trading creates more tax friction than a few deliberate sales over a long time. A plan to accumulate fits the way the rules are written. That is an observation about tax, not advice about what to buy or when to sell.
The full walkthrough, with what to confirm with your CA, is in our Bitcoin SIP tax guide. If you are still deciding how to buy, the SIP vs lump sum page compares the two approaches. General information only, not tax or investment advice.
Common questions
Is Bitcoin SIP taxable in India?
Buying through a SIP is not a taxable event. Tax applies when you sell, swap or spend: the gain is taxed at a flat 30% plus applicable surcharge and cess, with only the cost of acquisition deductible.
Is TDS deducted on every SIP buy?
No. The 1% TDS applies to the transfer of a VDA, which is the sale, not the purchase. It is calculated on the sale value and counts toward your tax when you claim it in your return.
How do I calculate cost for SIP Bitcoin?
Each buy has its own cost. When you sell part of a holding, your gain depends on which buys the sale is matched against. The law does not set a method for VDAs; FIFO is common. Agree a method with your CA and stay consistent.
What is the minimum Bitcoin SIP?
On Unocoin, a Systematic Buying Plan starts at ₹10, daily, weekly or monthly, with a 0% SBP fee.