The short version
| Tax on gains | Flat 30% on the profit from selling or transferring a virtual digital asset (VDA), plus 4% health and education cess on that tax. Section 115BBH. |
|---|---|
| What you can subtract | Only the cost you paid to acquire it. No other expense, no holding-period benefit, no slab rates. |
| Losses | Cannot be set off against any other income, not even gains on another VDA, and cannot be carried forward. |
| TDS | 1% of the sale value, deducted at the time of the transfer. Section 194S. It is an advance payment against your tax, not an extra tax. |
| Reporting | Every sale goes in Schedule VDA of the return (ITR-2 or ITR-3). |
| Gifts | A VDA received as a gift can be taxable in the receiver's hands above ₹50,000 in a year, unless it comes from a relative. |
Sources: Income Tax Department of India and the Finance Act 2022 (inserted sections 115BBH, 194S and 2(47A) into the Income-tax Act, 1961). The Income-tax Act, 2025 applies from 1 April 2026 and renumbers sections; the rules described here are carried over in substance, but check the current numbering with your CA.
A worked example
You bought Bitcoin for ₹1,00,000 and sold it for ₹1,50,000.
| Profit | ₹50,000 (sale value minus cost) |
|---|---|
| Tax at 30% | ₹15,000 |
| Cess at 4% of the tax | ₹600 |
| Total tax | ₹15,600 |
| TDS already deducted (1% of ₹1,50,000) | ₹1,500 |
| Still to pay when you file | ₹14,100 |
Your own numbers: use the Bitcoin tax calculator. Surcharge can apply at higher incomes and is not in this example.
General information, not tax or legal advice. Rules change and your situation may differ. Check your own return with a chartered accountant.
Where each topic is covered
- Bitcoin tax calculator: 30% plus cess on a trade, with TDS netted off.
- 1% TDS on Bitcoin: who deducts it, the thresholds, how to claim it.
- How to report Bitcoin in your ITR (Schedule VDA).
- Can you offset Bitcoin losses? No, and what that means in practice.
- Tax on a Bitcoin SIP: many small buys, one return.
- Self-custody and tax: moving coins to your own wallet.
- Gifting Bitcoin in India.
What has changed lately
The 30% rate and 1% TDS were left unchanged in Budget 2026, as reported by tax and crypto press at the time. The newer pressure is on reporting: platforms have to file transaction statements, and press coverage of Budget 2026 describes penalties of ₹200 a day for late filing and ₹50,000 for inaccurate information. Those penalties fall on the reporting platform, not on you, but they mean your trades are visible to the tax department. India has also signalled adoption of the OECD crypto-asset reporting framework (CARF), with data sharing reported from 2027. Treat dates reported in the press as indicative and check the official notifications.
Sources: Income Tax Department, OECD CARF.
Common questions
How is Bitcoin taxed in India?
Profit from selling or transferring Bitcoin is taxed at a flat 30% under section 115BBH, plus 4% cess. Only the cost of acquisition can be deducted. A 1% TDS is deducted on the sale value under section 194S and adjusts against your final tax.
Is there a holding-period benefit or long-term rate for Bitcoin?
No. Short or long, the rate is the same flat 30% on the gain.
Can I set off Bitcoin losses against other income?
No. Losses from a VDA cannot be set off against any other income, including gains on another VDA, and cannot be carried forward.
Do I pay tax if I only buy and hold?
Tax arises when you transfer (sell, swap or spend) a VDA. Buying and holding does not create a tax bill, but gifts received can be taxable above ₹50,000 in a year.
Where do I report Bitcoin in my return?
In Schedule VDA, available in ITR-2 and ITR-3. ITR-1 cannot be used if you have VDA income.
Risk: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Everything here is education, not investment, tax or legal advice.