Crypto Exchanges Now Report Your Trades to Income Tax Dept
Under a rule in force since 1 April 2026, crypto platforms must send user-level trade data to the Income Tax Department. Here is what it means for you.
If you trade crypto in India, the Income Tax Department can now see your trades directly. A rule that took effect on 1 April 2026 requires crypto exchanges and other platforms to send statements of their users' crypto transactions to the tax department. An updated guide from the department on virtual digital assets (VDAs) sets out the rule alongside the existing 30% tax and 1% TDS, which stay unchanged.
Key takeaways
- Crypto platforms must now report their users' transactions to the Income Tax Department.
- The rule was added as Section 285BAA by the Finance Act 2025 and now sits in Section 509 of the new Income-tax Act 2025.
- Platforms face a penalty of ₹200 per day for late statements and ₹50,000 for wrong information.
- The 30% tax on gains and 1% TDS on transfers do not change.
- From April 2027, India plans to join a global system under which other countries share data on Indians' crypto held abroad.
What the rule says
The rule makes "prescribed" reporting entities file a statement of crypto-asset transactions for each reporting period, in a set format and by a set date. In practice this covers crypto exchanges and similar service providers that handle crypto for Indian users. The information is at the level of individual users, linked to their identity and tax details, rather than just totals.
The penalties fall on the platform, not on you. A platform that files late pays ₹200 for each day of delay. One that files wrong information, fails to fix a known error or skips required checks can be fined ₹50,000.
What does not change
- Tax rate: gains from selling, swapping or spending crypto are taxed at a flat 30%, plus cess. Only the purchase cost can be deducted.
- Losses: a loss on one coin cannot be set off against a gain on another, or against other income, and cannot be carried forward.
- TDS: 1% is deducted on transfers above ₹50,000 a year for most individuals and HUFs, or ₹10,000 for others.
- Your return: you must still report every transfer in Schedule VDA of your income tax return. The platform's report does not replace yours.
Why it matters
Until now, the tax department mainly traced crypto trading through the 1% TDS, which shows up in your Form 26AS and Annual Information Statement (AIS). TDS shows that a transfer happened, but not the full picture of what you bought and sold. The new statements fill that gap. If the gains in your return do not match what your exchange reports, expect a notice.
The net will widen further. India has said it will adopt the OECD's Crypto-Asset Reporting Framework (CARF) from April 2027. Under CARF, exchanges in other signing countries report their users' data to those users' home tax authorities. That means crypto held by Indians on foreign platforms is also likely to become visible to the Indian tax department.
What you should do
- Keep records of every buy, sell, swap and transfer, with dates, amounts and rupee values. Download your exchange's tax or trade reports every year.
- Check your AIS on the income tax portal and make sure the TDS shown matches your own records.
- Report everything in Schedule VDA, including coin-to-coin swaps, which count as transfers.
- Fix past gaps: if you missed crypto income in an earlier year, you may be able to file an updated return. Speak to a chartered accountant.
Our guides on how to file crypto taxes in India and what to do if you get a crypto tax notice walk through each step, and our crypto tax calculator works out what you owe.
FAQ
Does my crypto exchange share my data with the Income Tax Department?
Yes. Since 1 April 2026, crypto platforms must file statements of their users' crypto transactions with the tax department.
Has the crypto tax rate changed?
No. Gains are still taxed at 30%, and 1% TDS still applies to transfers above the yearly threshold.
Do I still need to report crypto in my ITR?
Yes. You must report all crypto transfers in Schedule VDA, even though your exchange also reports them.
This article is AI-assisted, educational and general in nature. It is not financial advice and never a guarantee of profit. Every trade is at your own risk on your own exchange. See our risk disclosure and editorial policy.
