How to report Bitcoin in your income tax return.

Which form

Schedule VDA sits in ITR-2 (investors, no business income) and ITR-3 (if you also have business or professional income). ITR-1 cannot be used when you have income from a virtual digital asset. Filing is generally due on 31 July for individuals who do not need an audit, though the date is sometimes extended. Check the current year's due date on the portal.

What you enter for each sale

• The date you acquired it and the date you transferred it.
• The head of income (most investors use capital gains; traders may use business income).
• Cost of acquisition.
• Consideration received, which is the sale value.
• The income from the transfer, which is the difference.

Report every transfer, including sales at a loss, swaps and spends. A loss is shown but gives no tax relief, see Bitcoin losses. Enter the TDS in the tax-paid section so it is credited.

Records to keep

• Your full trade history and statements from every platform you used.
• Deposit and withdrawal records, with dates and transaction IDs.
• Wallet addresses and on-chain transaction IDs for anything held outside an exchange.
• Form 26AS and AIS to match TDS.

Common mistakes

• Leaving out small sales. The department sees platform data in your AIS, so mismatches get flagged.
• Netting a loss against a gain. Not allowed for VDAs.
• Forgetting to claim TDS.
• Using ITR-1.

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.