Crypto Tax India: Rules, Risks, and How to Stay Compliant

When you trade or hold cryptocurrency in India, you’re not just investing—you’re entering a crypto tax India, the legal framework that treats digital assets as taxable property under Indian income tax law. Also known as virtual digital asset taxation, it applies to every trade, staking reward, airdrop, or sale, no matter how small. The rules changed in 2022, and since then, the government has been clear: crypto isn’t legal tender, but it’s definitely taxable.

If you bought Bitcoin on WazirX, earned tokens from a Binance airdrop, or sold ETH for INR, you owe tax. The Indian crypto regulations, the set of guidelines issued by the Income Tax Department and the Reserve Bank of India to track and tax digital asset transactions require you to report all gains as "income from other sources" at a flat 30% rate. No deductions, no offsets—just 30% on profits. Plus, there’s a 1% TDS on every trade over ₹50,000 (or ₹10,000 in a single month). That’s not a suggestion—it’s automatic, enforced by exchanges. Even if you didn’t cash out, swapping one coin for another triggers a taxable event. The government tracks this through blockchain analytics and exchange data sharing.

Many people think crypto is anonymous, so it’s invisible to tax authorities. That’s a dangerous myth. The cryptocurrency taxation, the process of calculating and reporting gains, losses, and income from digital assets under Indian law system now includes mandatory KYC on all major platforms. If you used CoinSwitch, ZebPay, or Coinbase in India, your transaction history is already in the tax department’s hands. Missing a report doesn’t make it disappear—it makes you a target for audits. And if you’ve been mining crypto or earning staking rewards, those are also taxable. No exceptions.

What about gifts or airdrops? If you got METIS or SENSO tokens for free, you owe tax on their value the moment you received them. The same goes for tokens from an IDO like WagyuSwap or a referral bonus from Legion SuperApp. You can’t ignore them just because you didn’t pay for them. And yes, if you lost money on a scam exchange like HUA, you still can’t offset that loss against your gains. India doesn’t allow crypto loss carryforwards.

There’s no gray area here. The crypto income tax India, the mandatory 30% tax on all cryptocurrency profits under Section 115BBH of the Income Tax Act is strict, and enforcement is getting tighter. If you’re holding crypto, you need records: when you bought, how much you paid, when you sold, and what you got. Use a simple spreadsheet or a free crypto tax tool. Don’t wait for a notice from the IT department. File your returns on time, even if you think your gains are small.

What you’ll find below are real guides from traders and investors who’ve been through this. You’ll see how others handled airdrops, what they reported, and how they avoided mistakes that led to penalties. There’s no fluff—just what works in India right now. Whether you’re new to crypto or you’ve been trading for years, the rules haven’t changed. The only thing that can save you is knowing them—and acting on them.