Crypto Tax in India in 2026: 30%, the 1% TDS, the Loss You Can't Use, and What the Platforms Really Report

India's crypto investors learned the rules of 2022 the hard way. A flat 30% on every gain, a 1% deduction on every sale, and a loss that can't be set against anything. Four years on, those rules have moved into the Income-tax Act, 2025, mostly unchanged. Beside them sits something new, a crypto reporting system, and it is widely misread: it is not about resident Indian investors at all.

This is what the law says now, section by section.

What counts as a virtual digital asset

Section 2(111) keeps the familiar definition: any cryptographically generated token that represents value and can be traded electronically, non-fungible tokens, and anything else the Government notifies. It adds a fourth limb that the 1961 Act did not have: any crypto-asset, meaning a digital representation of value that relies on a cryptographically secured distributed ledger, whether or not it falls within the other three.

30%, and nothing else

Under section 194(1), Table serial 4, the successor to section 115BBH, income from the transfer of any virtual digital asset is taxed at 30%, plus cess and any surcharge. Two conditions make it harsher than any other income:

• No deduction except the cost of acquisition. No exchange fees, no expenses, no allowance.
• No set-off, no carry-forward. A loss on one crypto asset can't be set against a gain on another, or against any other income, and it can't be carried to next year.

So if you gain ₹1,50,000 on one coin and lose ₹60,000 on another, you pay 30% on the full ₹1,50,000.

The 1% on every sale

Under section 393(1), Table serial 8(vi), the successor to section 194S, whoever pays for a crypto asset deducts 1% of the consideration. The thresholds sit in section 393(4), serial 12. No deduction is needed where the consideration in the year does not exceed:

• ₹50,000, when the buyer is an individual or HUF with no business income, or whose business turnover last year was within ₹1 crore (₹50 lakh for a profession);
• ₹10,000, when the buyer is anyone else.

An individual or HUF buyer within the ₹50,000 class pays the tax with Form 141 within thirty days of the month-end, and needs no TAN for it under section 397(1)(c). An exchange that pays the tax on its own sales, under the Board's guidelines, reports those sales quarterly in Form 142.

Where the payment is wholly in kind, crypto for crypto, the payer has to make sure the tax has been paid before releasing the consideration. The TDS isn't an extra tax. It is credited against the seller's own tax.

Gifts

A crypto asset received as a gift is taxable in the recipient's hands if the value of such gifts received in the year, taken together, exceeds ₹50,000, under section 92(2)(m). Section 92(5)(f)(x) names virtual digital assets as "property" for this purpose. Gifts from relatives, on marriage and by inheritance are exempt, as with any other property.

What the Act doesn't say

The Act has no specific provision on mining, staking or airdrops. How that income is taxed turns on general principles, and anyone who tells you it is settled by a section is going further than the text.

What the platforms report, and about whom

• Section 509 of the Act requires a crypto-asset service provider to furnish a statement on crypto-asset transactions. Rules 241 to 243 of the 2026 Rules set it up as India's part of the OECD's Crypto-Asset Reporting Framework.
• The statement covers reportable users, and rule 241(g) defines a reportable person as one resident in a country or territory outside India. It is how India tells other countries about their residents' trades on Indian platforms.
• Reporting starts with calendar year 2026. The statement, Form 167, is due by 31 May of the following year.
• Section 446, substituted by the Finance Act, 2026 from 1 April 2026, penalises the platform ₹200 a day for not filing, and ₹50,000 for inaccurate information it does not correct or for failing its due-diligence duties.

For a resident investor, the department's view of the trades comes from somewhere else: the 1% TDS. Every deduction is reported against the seller's PAN in the deductor's statement.

Failing to pay that TDS is itself serious. Section 476(1), substituted from 1 April 2026, scales prosecution for failing to pay TDS, crypto included, to the amount involved: up to two years where the tax exceeds ₹50 lakh, up to six months between ₹10 lakh and ₹50 lakh, and a fine below that.

Form 167 is not a report on you, if you live in India. Your TDS already is.

Work out your own

Where this comes from

The law is the Income-tax Act, 2025 as amended by the Finance Act, 2026: sections 2(111), 92, 194, 393, 397, 446, 476 and 509. The reporting rules are rules 218, 219 and 241 to 243 of the Income-tax Rules, 2026, with Forms 141, 142 and 167. Rates are before surcharge. The Act does not deal with mining, staking or airdrops specifically, and this page doesn't pretend otherwise.