The tax rules for spot Bitcoin in India are clear: a flat 30% on gains under section 115BBH plus surcharge and cess, 1% TDS on sales, and no set-off or carry forward of losses. The rules for crypto futures and options are not clear. Budget 2025 did not extend securities transaction tax to crypto F&O, commentary at the time described crypto derivatives income as generally treated as business income, and the same commentary said the classification remains uncertain.
So the honest answer to "how are crypto futures taxed in India" is: nobody can give you a settled rate with confidence, and anyone who does is guessing. If you trade crypto derivatives, you need a CA who knows this area before you file, not after. This post explains what is settled for spot Bitcoin, what is unsettled for derivatives, the questions to take to your CA, and why I steer first-time buyers away from leverage altogether.
Why I tell beginners to stay away from leverage
I co-founded Unocoin in 2013. In all the years since, my advice to first-time buyers has been simple: buy a small amount of actual Bitcoin, learn how it works, and do not borrow to do it.
Futures and options are leverage by another name. They let you take a much bigger position than the money you put in, which means losses can arrive faster than you can react. For someone still learning what Bitcoin is, that is the wrong place to start.
The tax uncertainty is one more reason. With spot Bitcoin you can work out your tax on a calculator. With crypto F&O you may not know how your profits or losses will be treated until a professional has looked at your specific trades. Adding tax risk on top of market risk is not a good trade for a beginner.
Spot Bitcoin: the VDA rules
When you buy actual Bitcoin and later sell, swap or spend it, you are transferring a virtual digital asset. The Finance Act 2022 set the rules:
- A flat 30% tax on income from the transfer, under section 115BBH, plus surcharge where applicable and 4% cess
- Only the cost of acquisition is deductible. No other expense or allowance
- Losses cannot be set off against any other income, including other VDA gains, and cannot be carried forward
- 1% TDS on the sale value under section 194S (now section 393 under the Income-tax Act, 2025), above small thresholds
- Reported in Schedule VDA, in ITR-2 or ITR-3
These rules are strict, but they are clear. You can plan around them, and our tax guide covers them in detail.
Crypto futures and options: what Budget 2025 said and did not say
A crypto future is a contract on the price of Bitcoin or another token, settled at a later date, often without you ever holding the token. An option gives you the right, not the obligation, to buy or sell at a set price. Both are derivatives: their value comes from the crypto, but they are not the crypto itself.
Budget 2025 brought several changes for VDAs that took effect from 1 April 2026: a new reporting duty for exchanges under section 285BAA, a wider definition of VDA, and VDAs added to undisclosed income in search cases. But on derivatives, what it did not do was extend securities transaction tax to crypto futures and options.
Business Today's coverage of the Budget noted that crypto F&O is generally treated as business income, and that its classification remains uncertain. I am not going to go further than that, because no source I trust states a settled rate or treatment for crypto derivatives in India. I will also not compare it with how equity F&O is taxed, because that comparison would suggest a certainty that does not exist.
Why the classification is still unclear
The VDA rules were written around transfers of virtual digital assets. A derivative contract raises questions those rules do not answer neatly:
- Is a crypto futures contract itself a VDA, or something else?
- If it is not a VDA, does the 30% flat rate apply, or does it fall under normal business income rules?
- If profits are business income, can losses from derivatives be set off in ways that spot VDA losses cannot?
- How does TDS apply when no token changes hands?
- What happens when the contract is on an offshore platform that is not registered with FIU-IND?
Each of these turns on the exact contract, the platform, how it is settled, and your own situation. The answers have real money attached. That is exactly why they need a professional, not a blog post.
Losses and set-off: questions to ask your CA
If you trade crypto derivatives, take these questions to a CA before your next filing:
- Are my derivative profits and losses business income, and if so, which ITR form should I file?
- Does section 115BBH apply to any of my derivative income, or none of it?
- Can my derivative losses be set off against anything, and can they be carried forward?
- Was TDS deducted on any of these trades, and how do I claim it?
- Do I need to maintain books of account for this activity?
- If I traded on a platform outside India, what are my reporting obligations?
Bring full statements from every platform, including every trade, fee and funding payment, for the whole financial year. The more complete your records, the better the advice you will get.
A word on where you trade
Many crypto derivatives platforms are based outside India. FIU-IND has made clear that anti-money-laundering obligations apply to any platform serving Indian users, wherever it is based. It has issued notices to dozens of offshore platforms since 2023 and sought blocks on their apps and websites, and has fined some of them.
If a platform you use is not registered with FIU-IND, you face more than tax uncertainty. Your access can be cut off, and you may struggle to get records you need for your return. Check the FIU-IND list on fiuindia.gov.in before you deposit anything anywhere. And never use an offshore platform to try to avoid TDS or reporting. That is not a tax plan. It is a future problem.
Why leverage is a poor place to start
I will say this plainly, because I would rather lose a reader than see someone hurt.
Crypto products are unregulated in India and can be highly risky, and there may be no regulatory recourse for any loss. Leverage multiplies that risk. Unsettled tax rules add another layer of uncertainty on top. For someone starting out, that is three layers of risk at once.
If you are new, learn with spot Bitcoin first. Buy a small amount you can afford to see fall. Learn how wallets, TDS and Schedule VDA work. Understand the 30% rule and the no-set-off rule from our losses guide. Many people start with small, regular purchases rather than one big bet. None of that is exciting. All of it is how people are still around in Bitcoin a decade later.
Start with the plain tax guide. It covers the rules that are settled, with worked rupee examples, and it is the right foundation before you even think about derivatives. Then check your own situation with a CA before you trade anything you do not fully understand.
Common questions
How are crypto futures taxed in India?
The treatment is unsettled. Commentary on Budget 2025 described crypto F&O income as generally treated as business income while noting its classification remains uncertain. There is no settled rate we can state. Ask a CA before you file.
Is crypto F&O a VDA?
That is one of the open questions. Spot Bitcoin is clearly a virtual digital asset taxed under section 115BBH. Whether a derivative contract on crypto is itself a VDA is not settled, so get professional advice.
Can crypto futures losses be set off?
Spot VDA losses cannot be set off or carried forward. For crypto derivatives the position is uncertain and depends on how the income is classified. Ask a CA to review your trades.
Is STT charged on crypto futures?
No. Budget 2025 did not extend securities transaction tax to crypto futures and options.