India Crypto Taxation: What You Need to Know About Taxes on Bitcoin and Altcoins

When you buy, sell, or trade cryptocurrency in India, the government treats it as a digital asset, a taxable property under Indian income tax law. Also known as virtual digital asset, it’s subject to strict rules that changed dramatically in 2022—and they haven’t softened since. Unlike stocks or mutual funds, you can’t offset crypto losses against other income. Every trade, every swap, every airdrop you claim could trigger a tax event. If you sold Bitcoin for INR, bought an NFT with Ethereum, or earned rewards from staking, the Indian Revenue Service already knows—and they’re watching.

Here’s how it works: 30% tax on crypto gains, the flat rate applied to profits from selling or exchanging digital assets. No indexation. No expense deductions—not even transaction fees or gas costs. If you bought 1 BTC for ₹30 lakh and sold it for ₹40 lakh, you owe ₹3 lakh in taxes, no matter what else you spent that year. On top of that, 1% TDS, a withholding tax deducted at source on every crypto trade above ₹50,000 (or ₹10,000 in a single day) kicks in automatically through exchanges like WazirX, CoinDCX, or ZebPay. That money gets sent to the government before you even see your balance. You can claim it back during filing, but only if you file correctly—and many don’t.

What about gifts? If someone sends you crypto, you pay tax on its market value at the time you receive it. Mining? Also taxable as income. Airdrops? Taxed as ordinary income when claimed. Even swapping one coin for another counts as a sale. The rules are broad, and enforcement is tightening. The Income Tax Department now has direct access to exchange data through the Central Board of Direct Taxes (CBDT) and cross-references wallet addresses with bank statements. If you didn’t report your 2023 trades, you’re at risk.

There’s no exemption for small holders. No threshold below which taxes don’t apply. And there’s no official guidance on how to track transactions across wallets, DeFi protocols, or cross-chain bridges. That’s why so many Indian crypto users are confused—or worse, unaware. The system doesn’t make it easy, but it doesn’t make it optional either.

Below, you’ll find real-world breakdowns of how crypto taxes hit Indian investors, what exchanges report to the government, and how to avoid penalties. You’ll see examples from actual trades, learn how to calculate your liability, and understand why ignoring this isn’t an option anymore. This isn’t speculation—it’s the law, and it’s active right now.