Tax · 7 min read
Crypto Tax and TDS in India: A Guide for Sellers
How crypto (VDA) sales are taxed in India: 30% tax on gains, 1% TDS, loss rules, and how to report crypto-to-INR conversions in your income tax return.
By Bryan Aaron · Updated
Quick answer
In India, profit from selling crypto (a virtual digital asset) is taxed at a flat 30% plus cess, whatever your income slab. 1% TDS can apply on sales above ₹50,000 a year for most individuals (₹10,000 for others). Losses can't be set off against other income or carried forward. Confirm your case with a CA.
India taxes crypto as a virtual digital asset (VDA). If you sell crypto for INR, three rules matter: a flat tax on gains, TDS on the transfer, and strict limits on losses.
1. Flat 30% tax on gains
Gains from transferring a VDA are taxed at a flat 30% (plus applicable surcharge and 4% cess), regardless of your income slab or how long you held it (historically section 115BBH). The only deduction allowed is your cost of acquisition — no deduction for other expenses.
2. 1% TDS on transfers
TDS of 1% applies on payments for the transfer of a VDA above annual thresholds (historically section 194S): ₹50,000 a year for specified persons (broadly, individuals and HUFs without business audit requirements) and ₹10,000 for others. TDS is credited to your PAN and appears in Form 26AS / AIS, and you can claim it against your final tax liability.
3. Losses can't be offset
A loss on one VDA cannot be set off against gains on another VDA or against any other income, and it cannot be carried forward. Each profitable sale is taxed on its own.
Example
You bought 1,000 USDT for ₹84,000 and sell it for a net ₹88,354. Your gain is ₹4,354, taxed at 30% plus cess. If TDS was deducted at the time of sale, it reduces what you owe when you file.
How to report
- Report VDA transfers in the dedicated VDA schedule of your ITR.
- Keep purchase records (cost, date) and sale records (INR received, date, fee).
- Download your Disburz transaction statements, which include rate, fee, INR paid and UTR for each order.
- Match TDS credits against Form 26AS / AIS before filing.
Gifts and freelancers
Crypto received as payment for freelance work is generally treated as income when received, valued at its INR value on that date; a later sale is a separate VDA transfer. Crypto received as a gift above prescribed limits can be taxable in the hands of the recipient. Speak to a CA if this applies to you.
Step-by-step guides: paid in USDT as a freelancer and USDT received from family abroad.
