Crypto Tax in India: The 30% Tax & 1% TDS Explained (2026)

India has some of the strictest crypto tax rules in the world. If you trade from India, understanding them isn't optional — the rules apply whether you profit or not. Here's the plain-English version. (This is general information, not tax advice — confirm specifics with a qualified CA, and note rules can change.)

The flat 30% tax on gains

Income from transferring virtual digital assets (crypto, NFTs) is taxed at a flat 30%, plus applicable surcharge and cess — no matter your income slab. You can deduct only the cost of acquisition; no other expenses, and no benefit of lower slabs.

No loss set-off

This is the part that catches traders out. Losses from one crypto cannot be set off against gains from another, and they can't be carried forward. Win on BTC, lose on ETH? You still pay 30% on the BTC gain, with no relief for the ETH loss.

The 1% TDS

On top of the 30%, a 1% TDS (Tax Deducted at Source) applies to crypto transfers above the threshold. It's deducted at the time of the transaction — which means active traders see 1% skimmed off each sale, tying up capital until they file and reconcile it.

What it means for traders

The 30% flat rate plus no loss offset plus 1% TDS rewards fewer, higher-conviction trades over high-frequency churning — every round-trip carries tax friction. Keep meticulous records of acquisition cost and TDS, and report under the VDA schedule when filing.