How to File Crypto Taxes in India: An ITR Walkthrough
A practical, step-by-step guide to reporting crypto gains in your Indian tax return: the VDA schedule, the flat 30%, the 1% TDS credit, and common mistakes.
Filing crypto taxes in India means reporting every Virtual Digital Asset (VDA) gain, applying the flat 30% tax under Section 115BBH, and claiming credit for any 1% TDS already deducted under Section 194S. There is no set-off for losses and no long-term discount, so accurate record-keeping is everything. This walkthrough shows the practical steps, from gathering statements to the final submission.
This is an educational overview of the process as it stands in 2026, not personalised advice. Tax forms and rules change every year, so verify the current version of the return and the exact schedule with a qualified CA or the Income Tax Department before you file.
Key takeaways
- Crypto gains are reported under the dedicated VDA schedule (Schedule VDA) in the ITR and taxed at a flat 30%.
- Only the cost of acquisition is deductible; fees and other costs are not.
- Losses cannot be set off or carried forward, so you cannot net a loss against a gain.
- Claim credit for the 1% TDS (Section 194S) so it reduces your final bill or comes back as a refund.
- Keep exchange statements, TDS certificates, and Form 26AS/AIS reconciled before you submit.
Step 1: Gather your records
Before you touch the return, collect a complete trail for the financial year:
- Exchange transaction statements: every buy and sell with dates, quantities, and INR values.
- TDS statements from each exchange showing the 1% deducted under Section 194S.
- Form 26AS and the Annual Information Statement (AIS): these show TDS reported to the department in your PAN. Reconcile them against your exchange records.
- Records of any peer-to-peer or wallet-to-wallet transfers, airdrops, or staking rewards, since these can also be VDA events.
If you traded across multiple platforms, consolidate everything into one sheet. Getting the numbers right at this stage is why we recommend reading how to calculate crypto gains for tax before you start.
Step 2: Compute each gain separately
For every disposal, the gain is simply sale value minus cost of acquisition. Remember the two rules that trip people up:
- You cannot deduct exchange fees, gas fees, or any other cost; only the purchase price counts.
- You cannot net a loss on one coin against a gain on another. Each winning trade is taxed on its own; losing trades are simply dropped.
There is no short-term/long-term split, so holding period is irrelevant to the calculation. The full logic and worked examples are in our crypto tax in India explainer.
Step 3: Choose the correct ITR form and fill Schedule VDA
Most individuals with crypto report under a return that includes Schedule VDA, the section built specifically for Virtual Digital Assets. In that schedule you enter, per transaction or in the required summarised form:
- Date of acquisition and date of transfer
- Cost of acquisition
- Consideration received (sale value)
- The resulting income, taxed at the flat 30%
The exact form (for example whether you use ITR-2 or ITR-3) depends on your overall income profile: salary only, business income, or trading treated as business. This is a common area to get wrong, so confirm the right form with a CA. Reporting crypto here does not make it illegal to hold; for context on the legal status, see is cryptocurrency legal in India.
Step 4: Claim your 1% TDS credit
The 1% TDS deducted under Section 194S is not an extra tax. It is a prepayment. When filing, you claim it as tax already paid so it reduces your final liability. If the TDS deducted is more than your actual 30% tax, the excess comes back as a refund. Make sure the TDS shown in your AIS/26AS matches what the exchange deducted; mismatches are the leading cause of processing delays. For a fuller picture of how this deduction works, read what the 1% TDS on crypto means.
Step 5: A quick worked summary
Here is how the pieces fit together for a simple year with two profitable disposals and ₹1,200 of TDS already deducted.
| Item | Amount (₹) |
|---|---|
| Gain on Bitcoin | 50,000 |
| Gain on Ethereum | 30,000 |
| Total taxable VDA income | 80,000 |
| Tax @ 30% | 24,000 |
| Add: 4% cess | 960 |
| Total tax payable | 24,960 |
| Less: 1% TDS already deducted | 1,200 |
| Net tax to pay before filing | 23,760 |
If the TDS had exceeded ₹24,960, the difference would be refunded instead. You can watch how coins like Ethereum are trading on our live markets page if you are timing a disposal near year-end.
Step 6: Verify, submit, and keep proof
Before submitting, cross-check totals against your AIS, e-verify the return (via Aadhaar OTP, net banking, or other approved methods), and download the acknowledgement. Retain your exchange statements and TDS certificates for several years in case of a query. If your situation is complex (business-level trading, foreign exchanges, or DeFi income), a CA is well worth the fee.
Common mistakes to avoid
- Netting losses against gains, which is not allowed.
- Deducting fees from profit, when only the cost of acquisition is deductible.
- Ignoring small trades, even though the 1% TDS threshold and reporting obligations can still apply.
- Forgetting airdrops, staking, or P2P transfers, which may also be taxable VDA events.
Frequently asked questions
Which ITR form do I use for crypto?
It depends on your income mix. Salaried individuals often use a form that includes Schedule VDA, while those treating trading as business may use a different one. Confirm the correct form for your case with a qualified CA.
What if the exchange already deducted TDS? Do I still file?
Yes. TDS is only a prepayment. You still report your gains, apply the 30% tax, and claim the TDS as credit. Excess TDS is refunded.
Do I need to report crypto if I only bought and never sold?
Simply holding is generally not a taxable event, but disposals, swaps, airdrops, and staking rewards can be. Keep full records so you can report correctly when you do transact.
Can I fix a mistake after filing?
You can usually file a revised return within the allowed window. For anything significant, get a CA to review before and after submission.
Filing crypto tax is mostly about clean records and applying the flat 30% correctly. When you are planning trades around the tax year, keep an eye on our live markets and AI forecasts, and always confirm the current forms and rules with a qualified CA or the Income Tax Department.
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.
