Tax on Crypto Gains in India 2025 Explained
Understand India’s latest Virtual Digital Asset (VDA) tax laws
Introduction: India’s Evolving Crypto Tax Framework
As of July 2025, India has introduced one of the most structured and comprehensive tax regimes for Virtual Digital Assets (VDAs), including cryptocurrencies and NFTs. The rollout of Schedule VDA, mandatory ITR disclosures, and 1% TDS rules makes it essential for investors and traders to understand their tax obligations.
Whether you’re buying, selling, or earning from digital assets, here’s everything you need to know about how crypto is taxed in India in 2025.
Key Crypto Tax Rules at a Glance
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What Is Schedule VDA?
The Income Tax Department has introduced Schedule VDA in the ITR forms to report income from Virtual Digital Assets. This includes:
- Date of acquisition and sale
- Type of asset (crypto or NFT)
- Cost of acquisition and sale proceeds
- Profits earned from each transaction
Non-disclosure or incorrect filing may lead to penalties or scrutiny.
Understanding 30% Tax on Crypto Gains
If you sell a crypto asset or NFT for a profit, it is taxed at a flat 30% rate under Section 115BBH. For example:
- Bought Ethereum for ₹60,000
- Sold it for ₹90,000
- Gain = ₹30,000
- Tax = ₹9,000 + 4% cess = ₹9,360
No deductions allowed for transaction fees, internet bills, or gas fees—only the purchase cost is deductible.
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1% TDS on Crypto Transfers
A 1% TDS (Tax Deducted at Source) is applicable on all crypto transactions above ₹10,000/year, effective since July 2022, and continues in 2025.
- Applies during sale or transfer of VDAs
- Exchanges automatically deduct TDS
- Shown in Form 26AS for tax credit at the time of filing returns
- Applies during sale or transfer of VDAs
Reporting in ITR: How to Stay Compliant
When filing your ITR:
- Use Schedule VDA in ITR-2 or ITR-3 (depending on your income type)
- Mention all crypto trades, airdrops, staking rewards
- Reconcile TDS details with Form 26AS
Non-reporting or misreporting may attract penalties or scrutiny under the Income Tax Act.
Important Notes
- Crypto losses cannot be adjusted against any other income (capital gains, salary, etc.)
- Losses cannot be carried forward to next year
- Gifting crypto/NFTs is taxable in the hands of the recipient (if the value > ₹50,000)
Final Thoughts
With India tightening compliance around Virtual Digital Assets, understanding how crypto gains are taxed in 2025 is critical for every investor and trader. Stay updated, maintain proper transaction records, and file your ITR with complete VDA disclosures.
If you’re unsure about reporting or calculations, consult a tax professional to avoid legal or financial issues later.
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