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29/05/2025

Crypto Tax in India (As of FY 2024-25)

In India, the taxation of cryptocurrency is governed under the Income Tax Act, 1961, with specific provisions introduced in Budget 2022 and continued thereafter. Here’s a concise overview of how crypto assets (Virtual Digital Assets – VDAs) are taxed in India:

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🔍 Definition of VDA

Under Section 2(47A) of the Income Tax Act:

A Virtual Digital Asset (VDA) includes cryptocurrencies like Bitcoin, Ethereum, NFTs (non-fungible tokens), and similar digital assets.

⸻

💰 Tax on Transfer of Crypto (Section 115BBH)

➤ Flat 30% Tax Rate
• Any income from the transfer of a crypto asset is taxed at 30%.
• No deduction allowed except the cost of acquisition.
• No set-off of losses from other heads of income.

Example:
If you bought crypto at ₹1,00,000 and sold it at ₹1,50,000
➡️ Profit = ₹50,000
➡️ Tax = 30% of ₹50,000 = ₹15,000 (plus surcharge and cess)

⸻

🚫 Losses Not Adjustable
• Loss from crypto transactions cannot be set off against any other income (like salary or business).
• Loss cannot be carried forward to future years.

⸻

🔁 Tax on Crypto-to-Crypto Transactions
• Swapping one crypto for another (e.g., Bitcoin to Ethereum) is considered a taxable event.
• Each such transaction is treated as a separate transfer, and tax is applicable on gains.

⸻

🔄 TDS on Crypto Transfers (Section 194S)

➤ 1% TDS
• Applicable on transfer of VDAs if the consideration exceeds:
• ₹50,000/year (for specified persons like individuals/HUFs with no business income)
• ₹10,000/year (for others)
• The buyer must deduct and deposit TDS with the government.

⸻

👥 Who is Liable to Pay Tax?
• The seller pays 30% tax on profit.
• The buyer deducts 1% TDS if limits are crossed.

⸻

🧾 Reporting in ITR

Crypto income must be reported under:
• “Income from Other Sources” or
• “Capital Gains” depending on the nature of holding and trading.

⸻

🔐 GST Implications

If crypto is traded as part of a business:
• GST may apply to service providers (like crypto exchanges).
• For regular investors, GST is not applicable on buying/selling for investment.

28/05/2025

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📍 Visit us:
Office No. 6, Paschim Vihar, East Metro Station, Delhi
📧 Email: [email protected]
📞 Phone: 74 19 94 94 94

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