Crypto Tax in India: Is There a Minimum Amount? (2026)
Is small crypto profit tax-free in India? The rules on minimum amounts, the basic exemption limit, the 87A rebate and 1% TDS thresholds, explained for 2026.
A common question from new investors is: "Is there a minimum amount before crypto tax applies in India?" The short answer is no. India has no tax-free amount for crypto profits. There are thresholds, but they apply to the 1% TDS, not to the 30% tax. This guide sets out what is taxed, what is disputed, and what you need to report, under the rules in force for 2026.
Key takeaways
- Crypto profits are taxed at a flat 30% plus 4% cess (31.2% in total), from the first rupee of gain.
- No deductions are allowed except the cost of buying. Losses cannot be set off or carried forward.
- The ₹12 lakh "no tax" rebate under section 87A does not cover crypto tax.
- The 1% TDS applies only above ₹50,000 of sales a year for most individuals (₹10,000 for others).
- Every crypto sale must be reported in Schedule VDA of your ITR, however small.
Is there a minimum amount for crypto tax?
No. Crypto and other virtual digital assets (VDAs) are taxed under a special regime: a flat 30% on profit, plus surcharge where it applies and a 4% health and education cess. A ₹500 profit is taxed exactly like a ₹5 lakh profit. The rule was section 115BBH of the old Income Tax Act 1961. From 1 April 2026 it carries over, with the same rate, into the new Income Tax Act 2025. Budget 2026 did not change the rate.
What makes the regime strict:
- Only the purchase cost is deductible. Exchange fees, internet costs and advisory fees are not.
- No set-off of losses. A loss on one coin cannot reduce the tax on a gain from another, or on salary or other income.
- No carry forward. Unused losses lapse at the end of the year.
Example: you make ₹20,000 profit on ETH and lose ₹15,000 on DOGE in the same year. You still pay 31.2% on ₹20,000, which is ₹6,240. The ₹15,000 loss is ignored. Try your own numbers in our crypto tax calculator.
Does the basic exemption limit apply?
This is where sources disagree. For some special-rate income, such as equity capital gains, the law expressly lets resident individuals use any unused basic exemption limit to reduce the taxable gain. The crypto section has no such clause, so most tax professionals read it as 30% from the first rupee, whatever your other income. A few guides argue that if your total income, including crypto, is below the exemption limit, no tax is due.
If this affects you, for example if you are a student or homemaker with little other income, speak to a chartered accountant before filing, and make sure your return shows the crypto income correctly either way.
What about the ₹12 lakh rebate under section 87A?
Under the new tax regime, the section 87A rebate means many people with income up to ₹12 lakh pay no tax on their normal income. From FY 2025-26, though, the law says this rebate cannot be used against tax on special-rate income, and crypto is special-rate income. So someone earning ₹8 lakh in salary plus ₹50,000 in crypto profit still pays 31.2% on the ₹50,000.
The thresholds that do exist: 1% TDS
The only "minimum amounts" in crypto tax apply to the 1% tax deducted at source (TDS) on transfers:
| Who is selling | TDS applies above |
|---|---|
| Individuals and HUFs with no business income, or with turnover up to ₹1 crore (₹50 lakh for professionals) | ₹50,000 a year |
| Everyone else | ₹10,000 a year |
| Seller without a PAN | 20% rate instead of 1% |
On Indian exchanges, the exchange deducts TDS automatically. In a private P2P deal, the buyer must deduct it. TDS is not an extra tax: it is credited against your final tax, and you can claim a refund if too much was deducted. Our guide to 1% TDS on crypto covers it in detail.
Reporting: even small amounts count
Every sale, swap or spend of crypto during the year goes into Schedule VDA of ITR-2 or ITR-3, with dates, cost and sale value. Leaving it out, even for small trades, can trigger a notice. The tax department has already found hundreds of crores of undisclosed crypto income and sent tens of thousands of reminder letters to people whose exchange data did not match their returns.
From 2026, exchanges must also report users' transactions to the tax department under new rules based on the global Crypto-Asset Reporting Framework (CARF), with data exchanged with other countries from 2027. Budget 2026 added penalties for exchanges that fail to report. Hiding small trades is getting harder every year. See how to show crypto in your ITR.
Section numbers under the new Income Tax Act
The Income Tax Act 2025 replaced the 1961 Act from 1 April 2026. The crypto rules moved to new section numbers but did not change in substance. Many articles, and your broker's statements, still use the old numbers: 115BBH for the 30% tax and 194S for the 1% TDS.
FAQ
Is crypto profit under ₹10,000 tax-free in India?
No. Any crypto profit is taxed at 30% plus cess. The ₹10,000 and ₹50,000 figures are TDS thresholds, not tax exemptions.
Do I pay tax if I lost money on crypto?
You pay no tax on a coin you sold at a loss, but that loss cannot reduce tax on gains from other coins. You still need to report the sale.
Is buying crypto taxed?
No. Buying is not taxed. Tax arises when you sell, swap or spend crypto at a profit. Gifts above ₹50,000 and airdrops can also be taxed: see tax on crypto gifts and airdrops.
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.
