Crypto and virtual digital assets
Anyone trading, investing in, mining or receiving crypto and other virtual digital assets.
Crypto and other virtual digital assets (VDAs) have their own, deliberately strict regime. Gains are taxed at a flat 30% under Section 115BBH, regardless of holding period, with no deduction for any expense other than the cost of acquisition, and no set-off of crypto losses against other income or even against other crypto gains. On top of that, a 1% TDS applies under Section 194S on transfers above a small threshold. This is the harshest tax treatment of any asset class in India, and the Section 87A rebate does not cover it. This hub explains the rules, the TDS mechanics, and how different crypto events are taxed.
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Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact Income Tax Department. Read our editorial scope →
Guides in this hub
- Crypto tax under Section 115BBH →
The flat 30%, no expenses, no loss set-off
- 1% TDS under Section 194S →
When the 1% applies and who deducts it
- Crypto events and how they are taxed →
Trading, mining, staking, airdrops, gifts and more
No set-off, no expenses
Unlike every other asset, crypto losses cannot be set off against crypto gains or any other income, and cannot be carried forward. The only deduction allowed against a gain is the cost of acquisition, not platform fees, interest or other costs. So two trades, one at a gain and one at a loss, are taxed on the gain in full with no relief for the loss.
The 1% TDS adds up
Section 194S deducts 1% on the transfer of a VDA above the threshold, which on active trading withholds a meaningful amount of capital across many transactions. It is reclaimable against your final liability, but it ties up cash, and reconciling it across exchanges matters.
Calculators for this topic
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