Tax on ₹1 Lakh Crypto Profit in India: Worked Example
On a ₹1 lakh crypto profit you pay ₹31,200 in India: 30% tax plus 4% cess. See how TDS is credited, when you owe more and how it compares with mutual funds.
If you make a profit of ₹1,00,000 on crypto in India, the tax is ₹31,200: a flat 30% (₹30,000) plus 4% health and education cess on that tax (₹1,200). The rate is the same whether you held the coins for a day or five years, and the 1% TDS already cut by your exchange counts towards this bill.
Key takeaways
- ₹1 lakh crypto profit = ₹30,000 tax + ₹1,200 cess = ₹31,200. You keep ₹68,800.
- Only the purchase cost is deducted. Trading fees, internet bills and losses on other coins do not reduce the taxable profit.
- The 1% TDS deducted on your sale is not an extra tax. It is credited against the ₹31,200 when you file your return.
- The same ₹1 lakh profit from an equity mutual fund could be tax-free (long term) or taxed at ₹20,800 (short term).
- Report the gain in Schedule VDA of your income tax return.
The calculation, step by step
Crypto gains fall under the rules for virtual digital assets (VDAs) introduced as Section 115BBH. The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, but the rate and structure for crypto carried over unchanged. Here is the arithmetic on a simple trade: you bought bitcoin for ₹2,00,000 and sold it for ₹3,00,000.
| Item | Amount | How it is worked out |
|---|---|---|
| Sale value | ₹3,00,000 | What you received |
| Cost of acquisition | ₹2,00,000 | What you paid for those coins |
| Taxable gain | ₹1,00,000 | Sale value minus cost only |
| Tax at 30% | ₹30,000 | Flat rate, no slab benefit |
| Cess at 4% | ₹1,200 | 4% of ₹30,000 |
| Total tax | ₹31,200 | Effective rate 31.2% |
| TDS already deducted | ₹3,000 | 1% of the ₹3,00,000 sale value |
| Balance to pay | ₹28,200 | ₹31,200 minus ₹3,000 |
Surcharge is added only when your total income crosses ₹50 lakh, so for most people with a ₹1 lakh gain the effective rate is exactly 31.2%. You can run your own figures in the crypto tax calculator, and our guide on how to calculate crypto gains for tax covers partial sales and multiple buys.
How the 1% TDS fits in
When you sell crypto on an Indian exchange, the exchange deducts 1% of the sale value as TDS and deposits it with the government against your PAN. On a ₹3,00,000 sale that is ₹3,000. Notice that TDS is based on the sale value, not the profit, which is why it is much smaller than your actual tax here.
- The ₹3,000 shows up in your Form 26AS and AIS a few weeks after the quarter ends. Our guide on checking crypto TDS in Form 26AS and AIS shows where.
- When you file, you claim it as tax already paid, so you only pay the remaining ₹28,200.
- If you made a loss overall, the TDS becomes a refund once you file. See how to claim a crypto TDS refund.
The TDS threshold is ₹50,000 a year for "specified persons" (mostly individuals without business income above the audit limit) and ₹10,000 for others. Below that, no TDS is cut, but the 30% tax still applies to your gain. More detail is in what is 1% TDS on crypto.
Things that do not reduce the ₹31,200
This is where many people get caught out. Under the VDA rules:
- Losses on other coins do not count. If you made ₹1 lakh on bitcoin and lost ₹40,000 on a meme coin in the same year, you still pay ₹31,200. The loss cannot be set off or carried forward. Our loss set-off guide explains why.
- Fees and expenses are not deductible. Exchange fees, GST on fees, withdrawal fees and advisory costs do not reduce the gain. Only the cost of acquisition is allowed.
- The low-income rebate does not help. The Section 87A rebate that makes income up to ₹12 lakh tax-free under the new regime does not apply to income taxed at special rates, and crypto gains are taxed at a special rate.
- The basic exemption limit is not set against it the usual way. Most tax professionals read the rules as taxing crypto gains at 30% even if your other income is low. If crypto is your only income and the total is small, ask a chartered accountant before filing.
Crypto vs equity mutual fund: same ₹1 lakh profit
Here is how a ₹1 lakh gain compares with an equity mutual fund, using the rates in force for FY 2026-27 (equity funds: 20% short-term if held 12 months or less, 12.5% long-term above a ₹1.25 lakh yearly exemption).
| Where the ₹1 lakh gain came from | Tax + 4% cess | You keep |
|---|---|---|
| Crypto, any holding period | ₹31,200 | ₹68,800 |
| Equity fund, held 12 months or less | ₹20,800 | ₹79,200 |
| Equity fund, held over 12 months (no other long-term gains) | ₹0 | ₹1,00,000 |
The gap is big. A patient mutual fund investor can take ₹1.25 lakh of long-term gains a year tax-free, while crypto gives no reward for holding longer. Equity fund losses can also be set off against other capital gains and carried forward for eight years; crypto losses cannot. We compare the two in more depth in crypto vs mutual funds.
When and how to pay the balance
If the tax still due for the year after TDS is ₹10,000 or more, advance tax rules apply. On a ₹1 lakh gain the balance of ₹28,200 is above that, so pay it as advance tax in the next instalment after your sale (15 June, 15 September, 15 December or 15 March) to limit interest. You can pay through the e-Pay Tax option on the Income Tax Department's e-filing portal.
At filing time, report each sale in Schedule VDA: date of purchase, date of sale, cost and sale value. Salaried people with crypto gains cannot use ITR-1; they typically file ITR-2, or ITR-3 if the crypto activity is treated as business. Step-by-step help is in how to show crypto in Schedule VDA, and the wider rules are in our crypto tax in India guide.
A quick scale check with bitcoin
Bitcoin is ₹7,969,285 right now on our bitcoin price in INR page. At about ₹81.4 lakh per bitcoin on 27 September 2026, a ₹1 lakh profit equals a rise of about 1.2% on one whole bitcoin, or a doubling on about ₹1 lakh invested. The tax is the same ₹31,200 either way: the rate depends on the size of the gain, not the size of the trade.
FAQ
How much tax do I pay on ₹1 lakh crypto profit?
₹31,200 in total: ₹30,000 at the flat 30% rate plus ₹1,200 cess. Surcharge is added only if your total income is above ₹50 lakh.
Is crypto profit under ₹1 lakh tax-free in India?
No. There is no tax-free limit for crypto gains. Even a ₹5,000 profit is taxed at 30% plus cess; see the minimum amount rules.
Does holding crypto for more than a year lower the tax?
No. Unlike shares or mutual funds, crypto has no long-term rate. The 30% applies whatever the holding period.
Is the 1% TDS in addition to the 30% tax?
No. TDS is an advance payment of your tax. It is credited against your final bill, and any excess is refunded when you file your return.
Can I reduce the tax by booking a loss on another coin?
No. Losses on one crypto cannot be set off against gains on another, or against any other income, and they cannot be carried forward.
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.
