Crypto Tax Filing India — Section 115BBH Guide
TL;DR: Crypto/VDA gains are taxed at flat 30% under Section 115BBH. No deductions except cost of acquisition. Losses cannot be set off against any other income. Report in Schedule VDA of ITR-2 or ITR-3. TaxZen computes crypto tax automatically — free →
Key Rules — Section 115BBH
- Tax rate: Flat 30% on gains (plus 4% cess and applicable surcharge)
- Deductions allowed: Only cost of acquisition. No infrastructure costs, no electricity, no trading fees.
- Loss set-off: Crypto losses CANNOT offset any other income (not even other crypto gains in some interpretations)
- Carry forward: Crypto losses cannot be carried forward to future years
- TDS (Section 194S): 1% TDS on crypto transactions above ₹10,000/year (₹50,000 for specified persons)
- Applies to: Bitcoin, Ethereum, all cryptocurrencies, NFTs, and any virtual digital asset (VDA)
- Airdrops & gifts: Taxable as income from other sources at slab rate (not 115BBH)
Which ITR Form for Crypto?
- ITR-2 — If you're salaried with crypto income (most common)
- ITR-3 — If you have business income along with crypto
- ITR-1 does NOT support crypto — having any VDA income disqualifies you from ITR-1
How to Compute Crypto Tax
- Calculate gain for each transaction: Sale price − Cost of acquisition = Gain
- Apply flat 30% tax on each gain (no netting of losses against gains across different VDAs)
- Add 4% health & education cess
- Add surcharge if applicable based on total income
- Deduct TDS already paid (1% under Section 194S) — claim credit in ITR
Common Mistakes
- ❌ Setting off crypto losses against salary or capital gains (not allowed)
- ❌ Deducting trading fees, platform charges, or gas fees (only cost of acquisition allowed)
- ❌ Filing ITR-1 with crypto income (must use ITR-2 or ITR-3)
- ❌ Forgetting to claim TDS credit (1% TDS paid by exchange)
- ❌ Not reporting airdrops/staking rewards (these are taxable income)
File your crypto taxes: TaxZen computes crypto tax and generates ITR JSON with Schedule VDA — free →