No tax while you accumulate
Buying Bitcoin, whether in one go or through a Systematic Buying Plan (SBP), is not a taxable event. Tax arises when you transfer it: sell, swap, or spend.
Each buy is its own purchase
A weekly plan of ₹500 makes 52 separate purchases in a year, each with its own date, price and cost of acquisition. When you later sell part of the holding, your gain depends on which purchases the sale is matched against. The law does not prescribe the matching method for VDAs. Many tax tools and advisers use first-in, first-out (FIFO). Ask your CA which method they will use and apply it consistently.
- Keep the full statement of every SBP purchase with date and rupee amount.
- Whether the trading fee counts toward cost is a point to confirm with your CA. SBP trades on Unocoin carry a 0% SBP fee.
- Selling a small part triggers 1% TDS on that sale value only.
Why SIPs suit the tax rule
Because losses are not deductible and each sale is taxed on its own, fewer, larger sales over a long horizon create less tax friction than frequent trading. A plan to accumulate, with deliberate and infrequent sales, fits that. See how a plan would have looked on past prices in the SBP Time Machine. It looks backward and is not a forecast.
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.
General information, not tax or legal advice. Rules change and your situation may differ. Check your own return with a chartered accountant.
Common questions
Do I pay tax on every SIP purchase?
No. Buying is not a taxable event. Tax arises when you sell, swap or spend.
How is the cost calculated when I sell part of a SIP holding?
It depends on how sales are matched to purchases. The law does not set a method for VDAs. FIFO is common. Confirm with your CA and stay consistent.
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.