India's 30% Crypto Tax: What Bitcoin Traders Need to Know in 2025

India's 30% Crypto Tax: What Bitcoin Traders Need to Know in 2025
Date: 14 Nov 2025 Cryptocurrency & Blockchain

India Crypto Tax Calculator

Calculate Your Tax Liability

Input your crypto transaction details to see your total tax obligation in India.

Your Tax Breakdown

Capital Gain

30% Tax

1% TDS

18% GST

Total Tax Liability:

Net Proceeds After Tax:

Note: Losses cannot be offset against other gains. TDS thresholds apply at ₹50,000 per financial year. GST is applied to transaction fees only.

How This Compares to Other Countries

United States

0-20% tax

Losses deductible

Germany

No tax if held >1 year

Losses deductible

Singapore

No capital gains tax

No tax on transactions

UK

10-20% tax

Losses deductible

India’s 30% tax on cryptocurrency gains isn’t just high-it’s unlike anything else in the world. If you’re trading Bitcoin or any other digital asset in India, this tax doesn’t care if you made money overall. It doesn’t care if you lost on Ethereum and only won on Bitcoin. It doesn’t care if you held for five years or traded ten times a day. All it sees is a profit-and it takes 30% of it, plus extra fees. And if you think you can dodge it by using foreign exchanges, think again. The rules are catching up.

How the 30% Crypto Tax Actually Works

The tax, introduced under Section 115BBH of the Income Tax Act on April 1, 2022, applies to every single sale or trade of a cryptocurrency. That includes Bitcoin, Ethereum, Solana, NFTs, even stablecoins if they’re swapped for something else. The calculation is simple: sell price minus purchase price, then multiply by 30%. That’s your tax bill.

But here’s the catch: you can’t deduct anything else. No transaction fees. No wallet costs. No gas fees. Not even the cost of buying the Bitcoin in the first place if you bought it on a foreign exchange and didn’t keep perfect records. Only the original purchase price counts. So if you bought 1 BTC for ₹30 lakh and sold it for ₹40 lakh, your taxable gain is ₹10 lakh. Tax due: ₹3 lakh.

Losses Don’t Count-Even If You’re Net Negative

This is where most traders get blindsided. Let’s say you traded aggressively in 2024-25. You lost ₹2.5 lakh on Dogecoin, ₹1.8 lakh on Shiba Inu, but made ₹4.5 lakh on Bitcoin. Your net profit? Zero. But under Indian law, you still owe tax on the ₹4.5 lakh Bitcoin gain. That’s ₹1.35 lakh in taxes-on money you didn’t actually keep.

Losses from one crypto can’t be used to reduce gains from another. And you can’t carry them forward to next year. If you lose money, it vanishes. No refunds. No offsets. No mercy. This rule is unique to India. In the U.S., the U.K., or Germany, losses offset gains. In India? You pay tax on every profit, even if your portfolio is underwater.

The 1% TDS That Sneaks Up on You

On top of the 30%, there’s a 1% Tax Deducted at Source (TDS) under Section 194S. It kicks in if you transfer more than ₹50,000 in crypto in a financial year (₹10,000 for certain cases like P2P trades). That means every time you sell Bitcoin on WazirX, CoinDCX, or even a peer-to-peer platform, the exchange automatically takes 1% of the sale value and sends it to the government.

Here’s the problem: if you trade across multiple platforms, you might get hit with TDS multiple times. Say you sold ₹60,000 worth of Bitcoin on Binance (via P2P) and another ₹40,000 on CoinSwitch. You’re over the ₹50,000 threshold on both. You pay 1% twice. But when you file your return, you only get credit for the TDS that was actually deducted. If a platform didn’t deduct it (some don’t), you’re on the hook to pay it yourself-or risk a notice from the tax department.

A trader faces two exchange paths, both leading to tax booths, with blockchain linked to Indian banking systems.

Now There’s 18% GST on Exchange Fees

In July 2025, the government added another layer: 18% GST on all crypto platform services. That means every trading fee, withdrawal fee, or conversion fee you pay to an Indian exchange now has 18% tax slapped on top. If you paid ₹500 to swap ETH for BTC, you now pay ₹90 in GST. It’s not on the asset itself-it’s on the service. But it adds up fast for active traders.

Some traders assumed GST wouldn’t apply to P2P trades. It does. If you’re using a platform like ZebPay or CoinSwitch to connect with buyers and sellers, the platform’s service fee is taxable. Even if you’re trading directly with someone, if you used an app to facilitate it, the fee is subject to GST. The government isn’t waiting for you to understand-it’s already collecting.

Why This Tax Is Harsher Than Anywhere Else

Compare India to the rest of the world:

  • United States: Long-term crypto gains taxed at 0%, 15%, or 20%. Losses offset gains. No TDS.
  • Germany: No tax if held over one year. Losses deductible.
  • Singapore: No capital gains tax at all.
  • United Kingdom: 10% or 20% capital gains tax, with loss offsetting.

India is the only major economy that:

  • Taxes all crypto gains at a flat 30%-no matter how long you held it
  • Doesn’t allow loss offsetting between different coins
  • Imposes TDS on every transfer over a low threshold
  • Adds GST on platform services

It’s not just a tax. It’s a deterrent. And it’s working. Trading volumes on Indian exchanges dropped 40-60% after the tax came in. Many traders moved to offshore platforms. But now, the tax department is tracking those transactions too-through bank records, KYC data, and even blockchain analytics tools.

What You Must Track (And How to Do It)

If you’ve traded crypto in India since 2022, you need to keep perfect records. The tax department doesn’t ask for them upfront-but if they audit you, you’ll need them. Here’s what to save:

  • Every purchase: date, amount, coin, price in INR, exchange used
  • Every sale or trade: date, amount, coin, price in INR, exchange used
  • Wallet addresses involved
  • Transaction IDs and screenshots of confirmations
  • Records of any fees paid (for TDS reconciliation)

Use a crypto tax tool like Koinly or ClearTax-they now have India-specific modules that auto-import data from Indian exchanges and calculate your liability. But don’t rely on them blindly. Cross-check with your own records. Some platforms still don’t report correctly, especially for P2P trades.

A desk covered in crypto records and tax tools, with a 'No Loss Offset' note and tax department watching.

What Happens If You Don’t Report?

The Income Tax Department has been actively matching data from exchanges, banks, and blockchain analytics firms. If you sold ₹10 lakh worth of Bitcoin and didn’t report it, you’ll get a notice. Penalties can be up to 200% of the tax evaded. Interest accrues at 1% per month. In extreme cases, the department can freeze bank accounts or initiate prosecution.

Many traders think, “I used a foreign exchange, so they don’t know.” But if you used UPI, NEFT, or any Indian bank to fund your account, the government has your trail. They’re not guessing-they’re matching.

Is There Any Way to Reduce Your Tax?

Not really. The rules are rigid. But here are a few things that might help:

  • Hold longer: Even though holding period doesn’t reduce the rate, holding for more than a year means you avoid short-term trading stress and might reduce your frequency of taxable events.
  • Use only one exchange: This simplifies TDS tracking and reduces the chance of missing deductions.
  • Don’t trade between crypto coins: Every swap is a taxable event. If you hold Bitcoin and want to buy Ethereum, sell Bitcoin first, then buy Ethereum with INR. It’s not cheaper, but it’s cleaner.
  • File your return on time: Use Schedule VDA in ITR-2. Don’t skip it. Even if you have no gain, report zero. Silence invites scrutiny.

There’s no loophole. No legal tax avoidance strategy. The government designed this to be hard to evade. Your only option is compliance.

What’s Next?

There’s no sign the 30% rate is changing. No indication TDS or GST will be removed. But the government is watching. Trading volumes are still down. Retail participation is shrinking. Institutional investors won’t touch crypto under this regime. The Reserve Bank of India and SEBI are working on a broader digital asset framework. Some experts think loss offsetting might be reconsidered by 2027-but don’t count on it.

For now, if you’re trading crypto in India, you’re paying one of the highest tax rates in the world. And you’re doing it without the protections most investors take for granted. The system isn’t built to encourage innovation. It’s built to collect. And it’s working.

Is the 30% crypto tax applied to every crypto trade in India?

Yes. Every sale, trade, or exchange of a cryptocurrency-Bitcoin, Ethereum, NFTs, or tokens-is taxed at 30% on the profit. It doesn’t matter if you held it for a day or five years. The tax applies to all Virtual Digital Assets (VDAs) as defined under Section 2(47A) of the Income Tax Act.

Can I offset losses from one cryptocurrency against gains from another?

No. India is one of the few countries that prohibits loss offsetting between different cryptocurrencies. If you lose money on Dogecoin but make money on Bitcoin, you still pay 30% tax on the Bitcoin profit. Losses cannot be carried forward to future years either.

What is the 1% TDS on crypto, and how does it affect me?

The 1% Tax Deducted at Source (TDS) applies to all crypto transfers exceeding ₹50,000 in a financial year (₹10,000 for P2P). Exchanges automatically deduct this when you sell or trade. You must account for this when filing your return, as you can claim credit for the amount deducted. If an exchange didn’t deduct it, you’re responsible for paying it yourself.

Do I need to pay GST on my crypto trades?

Yes. Since July 2025, 18% GST applies to all fees charged by crypto exchanges and platforms-including trading fees, withdrawal fees, and conversion fees. This is separate from the 30% income tax and 1% TDS. It’s not on the crypto itself, but on the service you’re paying for.

What happens if I don’t report my crypto gains to the tax department?

The Income Tax Department tracks crypto transactions through exchange data, bank records, and blockchain analytics. If you don’t report gains, you risk penalties up to 200% of the tax evaded, monthly interest at 1%, and possible legal action. Even if you used foreign exchanges, your Indian bank transactions leave a trail.

Can I use foreign exchanges to avoid India’s crypto tax?

No. Indian residents are taxed on global income. If you fund your foreign exchange account via UPI, NEFT, or any Indian bank, the government can trace the transactions. The tax department has agreements with international platforms and uses blockchain tracking tools to identify Indian users. Avoiding Indian exchanges doesn’t avoid your tax obligation.

Do I need to file a tax return even if I didn’t make a profit?

Yes. Even if your net gain is zero or negative, you must file your return using Schedule VDA and report all transactions. Failing to report any activity can trigger scrutiny, even if no tax is owed. Silence is not an option under India’s current crypto reporting rules.

Are there any tools to help calculate my crypto tax in India?

Yes. Platforms like Koinly and ClearTax have India-specific modules that auto-import data from major Indian exchanges and calculate your 30% tax liability, TDS, and GST. They also help with Schedule VDA filing. But always cross-check with your own records-some platforms still misreport P2P or international trades.

by Brennan Lockridge
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