With India’s flat 30% tax on crypto gains and 1% TDS on all transactions, navigating crypto taxes has become a serious concern for investors in 2025. Whether you’re trading, staking, gifting, or mining, the tax rules are stringent. Let’s walk through the entire process—from understanding tax obligations to filing your ITR confidently.
📌 1. Understand the Key Crypto Tax Rules
1. Flat 30% Tax on Profits (Section 115BBH)
- All gains from selling crypto—whether into INR or swapping into other cryptos—are taxed at 30% + 4% cess. No indexation, no period that eases your liability.
2. 1% TDS on Every Transfer (Section 194S)
- A 1% TDS applies on the value of each crypto transaction above ₹10,000–₹50,000 (depending on user type). Exchanges in India automatically deduct it; for P2P or international trades, it’s your responsibility.
3. No Loss Offset
- Losses from crypto cannot be offset against crypto gains, nor from other income, and cannot be carried forward. Only the purchase cost is allowed as deduction.
4. Other Taxable Events
- Crypto-related incomes like staking rewards, mining, airdrops, or gifts (outside relatives) must be reported as business income or income from other sources.
🧾 2. Prepare Your Transaction Records
Your first job is to organize every transaction. You need:
- Dates of purchase/sale/swaps
- Cost basis (purchase price + fees)
- Sale value per INR or crypto swap
- TDS deducted amounts from exchanges
- Records of airdrops, staking, mining payouts, or gifts
Use crypto tax tools (like Koinly, KoinX, CoinLedger) to import data from exchanges/wallets for ITR-ready reports .
🛠️ 3. Choose the Right ITR Form
- ITR‑2: For investors with capital gains + crypto profits; no business income.
- ITR‑3: For those engaged in frequent trading, mining, staking or earning crypto as a profession.
Filing due dates:
- Non-audit taxpayers: July 31, 2025
- Audit-required taxpayers: October 31, 2025
Belated returns accepted until December 31, 2025.
🗂️ 4. Fill ITR and Schedule VDA
- Login on the Income Tax portal and select ITR‑2 or ITR‑3.
- Go to Schedule VDA (Virtual Digital Assets).
- Add each transfer event:
- Date acquired
- Date transferred
- Cost of acquisition
- Consideration received
- Profit or loss for ITR
- Include any TDS deducted.
- For other incomes (staking, mining), declare under Other Sources or Business Income.
Tax calculators like KoinX provide exportable reports to pre-populate this section.
💸 5. Settle Tax Payable
Your total tax liability includes:
- 30% on crypto gains
- 1% TDS (can be claimed as credit)
- 4% cess
If the TDS hasn’t fully covered tax dues, you’ll need to pay additional tax:
- Use Advance Tax or Self Assessment Tax via Challan 280.
✅ 6. Review and Submit Your Return
- Double-check your inputs: Schedule VDA, income from other sources, and TDS credit from Form 26AS.
- Preview and validate on the Income Tax portal.
- E-verify using Aadhaar OTP, net banking, or DSC.
- Optionally, file for a refund if excess TDS was deducted.
🔄 7. Keep Records and Stay Updated
- Save the ITR acknowledgment, Form 26AS, Schedule VDA, and tax payment challans.
- Retain crypto reports and transaction data for at least 8 years.
- Monitor updates: global OECD CARF reporting, potential TDS or tax rate changes.
💡 Tips for Smooth Crypto Tax Filing
- Use reliable tax tools like Koinly, KoinX, CoinLedger—they simplify reporting.
- Ensure PAN is updated in exchanges to avoid excessive TDS.
- Accurately record gifting/airdrops as per FMV on the date of receipt.
- Classify correctly: capital gains, business income, or other income.
- Consult a CA, especially if your transactions are complex or frequent.
🏁 Final Takeaway
Filing crypto taxes in India (2025) may seem complex, but with proper documentation and reliable tools, you can comply confidently:
- Gather all transaction data
- Classify income types and choose the right ITR
- Report under Schedule VDA with precision
- Pay 30% tax and adjust TDS credits
- E-verify and retain documents
