ITR for Cryptocurrency in India 2026: Schedule VDA Filing Guide
Quick answer:
To file ITR for crypto in India, report all gains from Virtual Digital Assets (VDAs) under Schedule VDA in ITR-2 if you are an investor, or ITR-3 if you trade.
Crypto profits are taxed at a flat 30% plus 4% cess under Section 115BBH, with 1% TDS under Section 194S. The due date for FY 2025-26 is 31 July 2026.
Key Takeaways
- Crypto gains are taxed at a flat 30% (plus 4% cess) under Section 115BBH no slab benefit, no loss set off.
- A 1% TDS applies under Section 194S on transfers above ₹10,000 (₹50,000 for individuals without business income).
- Report every transaction in Schedule VDA ITR-2 for investors, ITR-3 for traders/business income.
- Last date for FY 2025-26 (AY 2026-27): 31 July 2026 (ITR-1/ITR-2) 31 August 2026 (non-audit ITR-3/ITR-4).
The Income Tax Department issued 44,000+ VDA notices in 2026, uncovering about $104 million in undisclosed income.
What is ITR for crypto in India?
Crypto in India is treated as a Virtual Digital Asset (VDA) under Section 2(47A) of the Income Tax Act. Any income from transferring a VDA selling, swapping, or spending it must be declared in your Income Tax Return.
The framework was introduced in Budget 2022 and has only tightened since.
The rate is blunt. Under Section 115BBH, profits are taxed at a flat 30% plus a 4% health and education cess, regardless of your income slab or holding period. There is no distinction between short-term and long-term gains.
(Source: Koinly, CoinDCX)
Which ITR form should I use for crypto?
Use ITR-2 if you hold crypto as an investment and report capital gains.
Use ITR-3 if you trade actively and treat crypto as business income. Both forms contain Schedule VDA, where each transaction is reported separately aggregated or summary entries are typically rejected.
(Source: Patron Accounting, KoinX)
How do I report crypto in Schedule VDA?
Schedule VDA requires transaction-wise detail: date of acquisition, date of transfer, cost of acquisition, sale consideration, and the resulting income.
Only the purchase price is deductible gas fees, exchange fees and brokerage costs cannot be claimed. (Source: Patron Accounting)
Schedule VDA reporting became mandatory from FY 2025-26 onwards. Before filing, download Form 26AS and your AIS, then match the 1% TDS recorded under Section 194S against your declared transactions. A mismatch can trigger a defective-return notice. (Source: KoinX)
What is the 1% TDS on crypto (Section 194S)?
Section 194S levies a 1% TDS on VDA transfers, effective since 1 July 2022. The threshold is ₹50,000 a year for individuals without business income (specified persons) and ₹10,000 for others.
The TDS is not an extra tax. It is a credit you adjust against your final 30% liability, or claim as a refund when filing. Indian exchanges such as CoinDCX deduct it automatically and report it to users.
What happens if I don’t report crypto in my ITR?
Enforcement has sharpened in 2026. According to the Economic Times (reported 14 June 2026), the Income Tax Department issued more than 44,000 VDA-related notices and uncovered roughly $104 million in undisclosed income this filing season.
The stakes rose further with Budget 2025. Unreported crypto found during a tax search is now treated as undisclosed income under Section 158B and can be taxed at 60% under block assessment, with a retrospective window of up to 48 months.
A late-filing fee of ₹5,000 also applies under Section 234F.
What changed for crypto tax in 2026?
From 1 April 2026, Indian crypto exchanges must share user transaction data directly with the Income Tax Department. Non-furnishing of the required statement can attract ₹200 per day, and inaccurate disclosure up to ₹50,000.
Investor sentiment remains strained. A CoinSwitch survey of 5,000 users found that about 66% consider the tax regime unfair and roughly 59% reported reduced participation because of it.
India is also targeting the OECD’s Crypto-Asset Reporting Framework (CARF) by April 2027, which would enable automatic cross-border sharing of offshore crypto data.
(Source: IFC Review, CoinSwitch)
Do I report crypto held on foreign exchanges?
Yes. Indian residents holding crypto on international platforms such as Binance or Coinbase must disclose them in Schedule FA (Foreign Assets) if the total value crosses ₹20 lakh.
Non-disclosure can invite penalties under the Black Money Act, which are far harsher than ordinary income-tax penalties.
Frequently Asked Questions (FAQ)
Is crypto legal to trade in India?
Yes, crypto trading is legal in India, though cryptocurrencies are not legal tender. They are classified as Virtual Digital Assets and taxed under Section 115BBH. Active day traders may need to declare business income rather than capital gains, while occasional investors usually report gains in ITR-2.
Can I set off crypto losses against other income?
No. Section 115BBH prohibits setting off VDA losses against any other income, including gains from other crypto. Losses also cannot be carried forward to future years. Each gain is taxed independently at 30%, and the only allowed deduction is the original cost of acquisition.
Do I pay tax on crypto-to-crypto swaps?
Yes. Every crypto-to-crypto swap is treated as a separate taxable transfer, valued at the fair market value in INR on the swap date. Spending crypto on goods or services is also a taxable transfer. Both must be reported in Schedule VDA at 30%.
Is staking, mining or airdrop income taxed?
Income from mining, staking rewards or airdrops may be taxed at your individual slab rate as other income when received. If you later sell those coins, any gain is taxed again at the flat 30% under Section 115BBH. Keep records of fair market value at receipt.
What is the last date to file crypto ITR for FY 2025-26?
The due date is 31 July 2026 for ITR-1 and ITR-2 filers, and 31 August 2026 for non-audit ITR-3 and ITR-4 filers. A belated return can be filed until 31 December 2026 with late fees, while revised returns are allowed until 31 March 2027.
Are crypto gifts taxed in India?
Yes. Crypto received as a gift from a non-relative is taxable as income from other sources at your slab rate if its value exceeds ₹50,000. Gifts from relatives, or those received through inheritance, marriage or a will, are generally exempt from tax.
How much TDS is deducted on crypto in India?
A 1% TDS applies under Section 194S on VDA transfers above ₹10,000 a year, or ₹50,000 for individuals without business income. Indian exchanges deduct it automatically. The TDS is adjustable against your final 30% tax, or refundable when you file your ITR.
