A Complete Guide for 2025

Introduction

With the rising popularity of crypto trading and virtual digital assets (VDAs), the Indian government has implemented a structured tax regime for cryptocurrencies. As of 2025, taxpayers in India must comply with specific rules for disclosing, calculating, and paying taxes on income derived from cryptocurrencies and other VDAs. In this article, we will discuss how cryptocurrency is taxed in India, including capital gains, P2P crypto tax, and updates for Crypto Tax in India 2025.

---

Taxation of Virtual Digital Assets (VDAs) in India

The Finance Act, 2022, introduced a new framework for taxing income from VDAs, which includes:

• Cryptocurrencies (like Bitcoin, Ethereum)

• NFTs (Non-Fungible Tokens)

• Any other digital asset as notified by the government

Key Provisions:

1. Flat Tax Rate of 30% on profits from the transfer of VDAs.

2. 1% TDS (Tax Deducted at Source) on all transactions above a specified threshold.

3. No deduction for expenses (except cost of acquisition).

4. No set-off of losses from VDA against other income or future crypto gains.

---

How to Calculate Tax on Cryptocurrency in India

Step 1: Identify the Transaction

• Selling crypto for INR

• Swapping one crypto for another

• Using crypto for purchases

• Receiving crypto as payment or mining rewards

Step 2: Determine Income

Use this formula for each transaction:

Taxable Income = Sale Value – Purchase Cost

No deduction is allowed for transaction fees, platform charges, or mining costs.

Step 3: Apply 30% Tax Rate

Example:
If you bought Bitcoin for ₹1,00,000 and sold it for ₹1,50,000:
Profit = ₹50,000 → Tax = ₹15,000 (30%)

Step 4: Deduct TDS

A 1% TDS is deducted at source if the annual transaction volume exceeds ₹10,000 (₹50,000 for specified persons). This TDS can be adjusted while filing your Income Tax Return (ITR).

---

P2P Crypto Tax in India

Peer-to-peer (P2P) crypto transactions are also taxable. Since these bypass centralized exchanges, the responsibility to deduct TDS and report income lies entirely with the buyer/seller.

Points to Remember:

• Keep a detailed record of wallet addresses and transaction history.

• Even unregulated exchanges and wallet-based trades are tracked via KYC and crypto analytics tools used by tax authorities.

---

Crypto Capital Gains Tax in India

Crypto profits are not taxed like stocks or mutual funds. Here’s how it differs:

Even gifting or transferring crypto to others may be considered a transfer and taxed accordingly.

---

Crypto Tax in India 2025: Latest Updates

As of FY 2024-25 (AY 2025-26), the following remain applicable:

• No changes in the 30% tax or 1% TDS regime.

• Crypto platforms must issue Form 16A for TDS deduction on crypto transactions.

• Reporting of crypto in Schedule VDA in ITR is mandatory for individuals, even for small trades.

The government continues to refine tax enforcement on crypto with better data integration from exchanges, wallet addresses, and foreign trading platforms.

---

Filing Crypto Income in ITR

• Use ITR-2 or ITR-3, depending on other sources of income.

• Disclose income from VDA under the “Income from Other Sources” or “Capital Gains” section.

• Report all crypto-related transactions in Schedule VDA.

• Adjust 1% TDS in TDS Schedule while filing.

---

Why You Should Consult a Professional

Cryptocurrency tax in India involves complexities like exchange conversions, P2P trade records, and form filing. Consult a CA for Income Tax Filing, especially if:

• You traded on foreign platforms

• You had high-volume trades or losses

• You received airdrops, mining income, or crypto payments

• You require a CA Report for VISA or NRI disclosures

---

Keywords Optimized in This Article:

• Cryptocurrency tax in India

• How to calculate tax on cryptocurrency in India

• Crypto capital gains tax India

• P2P crypto tax India

• Crypto tax in India 2025

• Taxation of virtual digital assets in India

• CA for Income Tax Filing

• CA near me for ITR Filing

• CA Report for VISA

• CA for NRI Tax Filing

---

FAQs on Cryptocurrency Tax in India

1. Is cryptocurrency legal in India?

Crypto is not illegal, but it is unregulated. However, it is fully taxable.

2. How much is the tax on crypto in India?

A flat 30% tax is levied on gains from cryptocurrency, regardless of income level.

3. Is crypto trading on foreign exchanges taxed?

Yes. Income must be disclosed, and 1% TDS is applicable if the transaction is routed via an Indian exchange or platform.

4. Can I adjust crypto losses against other income?

No. Crypto losses cannot be set off against any income, including crypto gains in another year.

5. Do I have to pay tax on airdrops and mining rewards?

Yes. These are considered income and taxed at the applicable slab rate in the year received.

6. Which ITR form should I use to report crypto?

Usually ITR-2 or ITR-3, based on the nature of income and business activities.

7. Do I need to show my wallet transactions?

Yes, especially in the case of P2P or foreign transactions. The IT Department may ask for logs, wallet IDs, or exchange records.

8. How is TDS applied on crypto trades?

TDS of 1% is deducted at source on transactions above ₹10,000. This is deducted by the exchange or buyer.

9. Is gifting cryptocurrency taxable?

Yes. Gifts in excess of ₹50,000 in a financial year are taxable unless received from a relative.

10. Can NRIs be taxed on crypto income in India?

Yes, if the income accrues or arises in India or is received in India.

Contact Us for Expert Assistance

Navigating the complexities of cryptocurrency taxation in India requires expert guidance. Whether you’re filing your first crypto return, calculating P2P gains, or managing capital gains from multiple exchanges, our team is here to help.

You can get in touch with N C Agrawal & Associates, your trusted CA for Income Tax Filing, CA for NRI Tax Filing, and CA for Cryptocurrency Tax Filing at:

📞 +91 9718046555
📧 info@ncagrawal.com

Let us assist you in filing your taxes accurately and compliantly.