Cryptocurrency Tax Calculator
Indian Crypto Tax Calculator (2025)
Calculate your tax obligations for cryptocurrency transactions in India based on current regulations (Virtual Digital Assets/VDA classification).
Your Tax Obligations
Based on India's 2025 crypto regulations
When the Supreme Court struck down the RBI’s 2018 banking ban in 2020, many Indians thought the crypto wave had finally hit safe shores. Fast‑forward to October 2025, and the reality is messier: cryptocurrencies are legal to own and trade, but they’re barred from being called money, taxed at a steep 30%, and caught in a web of agency‑specific rules. This article untangles the current legal status, tax obligations, and regulatory landscape so you can trade, invest, or build a crypto business in India without getting blindsided.
Key Takeaways
- Cryptocurrencies are classified as Virtual Digital Assets (VDAs) under the Income Tax Act - legal to hold, buy, sell, but not legal tender.
- The Ministry of Finance imposes a flat 30% tax on all VDA gains, a 1% TDS on transfers above ₹50,000, and an 18% GST on exchange fees.
- The Reserve Bank of India (RBI) continues to issue warnings and is developing its own CBDC, but it no longer blocks banking services for crypto exchanges.
- All crypto service providers must register under the Prevention of Money Laundering Act (PMLA) and comply with KYC/AML rules enforced by the Financial Intelligence Unit‑India (FIU‑IND).
- Legislation to ban private cryptocurrencies is still in limbo, meaning the sector operates in a grey zone with heavy tax but no outright prohibition.
How the Law Defines Crypto in India
In 2020, the Supreme Court’s landmark judgment (Internet and Mobile Association of India v Reserve Bank of India) overturned the RBI’s April2018 circular that prohibited banks from dealing with crypto‑related entities. The court didn’t grant crypto the status of money; instead, it labeled digital tokens as Virtual Digital Assets (VDAs) under Section2(47A) of the Income Tax Act, 1961. That definition makes VDAs perfectly legal to own, trade, and mine, but they cannot be used as legal tender for everyday transactions.
Because they’re treated as assets rather than currency, all the usual rules that apply to stocks, commodities, or real estate kick in - especially on the tax front.
Tax Regime - What You Pay and When
The Ministry of Finance’s 2022‑2023 budget introduced a blunt‑force tax structure that still governs crypto in 2025:
- Flat 30% tax on any income derived from VDAs - capital gains, trading profits, staking rewards, and mining income alike.
- No loss‑set‑off: you cannot offset crypto losses against gains from other assets or against regular income.
- 1% Tax Deducted at Source (TDS) on every VDA transfer that exceeds ₹50,000. The payer must withhold the amount and remit it to the tax department.
- All exchanges charge an 18% GST on platform fees, which adds to the overall cost of trading.
- Every taxpayer must disclose VDA holdings in ScheduleVDA attached to ITR‑2 or ITR‑3. Failure to do so can trigger notices, penalties, or even invalidation of the entire return.
These tax rules serve as the de‑facto regulatory lever, shaping market behavior more than any explicit licencing framework.
Regulatory Agencies and Their Roles
India’s crypto oversight is a patchwork of mandates from several bodies:
- Reserve Bank of India (RBI) - issues periodic warnings, monitors systemic risk, and is building a sovereign CBDC (the Digital Rupee) that will be the only legal‑tender digital currency.
- Ministry of Finance - drafts fiscal policy, administers the 30% tax, TDS, and GST rules for crypto.
- Securities and Exchange Board of India (SEBI) - proposes a multi‑regulator oversight model, arguing that crypto trading can coexist with standard market regulation.
- Financial Intelligence Unit‑India (FIU‑IND) - enforces AML/KYC compliance for all VDA service providers under the PMLA.
- Supreme Court of India - its 2020 judgment remains the cornerstone of crypto legality.
Since March2023, any exchange, wallet, or NFT platform serving Indian users must register with the FIU‑IND under the Prevention of Money Laundering Act (PMLA). This registration forces businesses to implement robust KYC and AML processes, even though a dedicated self‑regulatory organisation (SRO) for crypto does not yet exist.
Practical Implications for Users and Businesses
What can you actually do with crypto in India today?
- Buy, sell, hold, or mine - no special licence required.
- Peer‑to‑peer payments are allowed if both parties consent, but the transaction is taxed as a capital gain and is not recognised as legal tender.
- Business acceptance - you can invoice a client in Bitcoin, but you’ll need to report the value in INR and pay 30% tax on any profit.
- Exchange operations - platforms must collect 1% TDS on qualifying transfers, charge 18% GST on fees, and file regular reports with FIU‑IND.
- Compliance checklist for crypto startups:
- Register with FIU‑IND under PMLA.
- Implement KYC/AML processes matching RBI guidelines.
- Integrate TDS‑deduction logic for transfers > ₹50,000.
- Configure accounting to apply 30% flat tax on all VDA income.
- Include GST on service fees and ensure proper invoicing.
Ongoing Legislative Uncertainty
Since 2021, the government has floated a draft bill that would outright ban private cryptocurrencies. The proposal has stalled in Parliament as of October2025, leaving the sector in a perpetual “wait‑and‑see” mode. This ambiguity fuels two opposing forces:
- Investors are wary of potential abrupt bans, which can trigger capital flight.
- Tax authorities continue to tighten collection, using the heavy‑tax regime as a lever to extract revenue while keeping policy options open.
Until a comprehensive crypto law is enacted-or the draft ban is formally withdrawn-the market will keep operating under this hybrid model of permissive activity and punitive taxation.
Comparison: Tax Treatment of Cryptocurrencies vs. Other Assets
| Asset Type | Tax Rate | Loss Set‑off | Additional Levies |
|---|---|---|---|
| Cryptocurrencies (VDAs) | 30% flat on gains | Not allowed | 1% TDS (>₹50k), 18% GST on fees |
| Equity Shares (STT>₹1lakh) | Short‑term: 15% LTCG tax; Long‑term: 10% above ₹1lakh | Allowed against other capital gains | No TDS, No GST |
| Real Estate | 20% on gains after indexation | Allowed against other capital gains | GST on under‑construction property (5‑12%) |
| Gold (Physical) | \n20% on gains above ₹50k | Allowed against other capital gains | No GST, but customs duty on imports |
The table makes it clear why many traders view crypto as a high‑cost investment compared with traditional assets.
What to Watch in the Next 12‑Month Horizon
- RBI’s Digital Rupee rollout - could shift user attention toward a state‑backed digital token.
- Potential re‑introduction of a crypto‑specific bill - monitor parliamentary sessions for any movement.
- FIU‑IND enforcement trends - expect stricter AML reporting thresholds.
- Tax authority guidance on crypto loss treatment - any softening would affect liquidity.
Frequently Asked Questions
Is it illegal to own Bitcoin in India?
No. Bitcoin and other cryptocurrencies are classified as Virtual Digital Assets, which you can legally buy, hold, sell, or mine. The restriction is that they are not recognised as legal tender.
How is crypto taxed in India?
All gains from VDAs are subject to a flat 30% tax. You cannot offset crypto losses against other income, and you must pay a 1% TDS on transfers above ₹50,000. Exchange fees also attract 18% GST.
Do I need a licence to run a crypto exchange in India?
You don’t need a specific crypto licence, but you must register under the Prevention of Money Laundering Act with the FIU‑IND and comply with KYC/AML, TDS, and GST requirements.
Can I pay my supplier in Bitcoin?
Yes, if both parties agree. However, the payment is treated as a sale of a VDA, so you’ll owe 30% tax on any profit, and the transaction isn’t recognised as legal tender.
What happens if the proposed crypto‑ban bill passes?
A passed ban would likely re‑impose the RBI’s 2018 restrictions, cutting off banking services for exchanges and making private crypto transactions illegal. Until then, the sector remains in a grey zone.
Post Comments (3)
India's 30% flat tax on crypto gains really changes the game for everyday traders. It means you need to factor that cost into every trade, otherwise profits evaporate fast. The 1% TDS on transfers over ₹50k adds another layer of paperwork. Still, the ability to hold and mine VDAs without a licence is a big plus compared to 2018.
Honestly, the tax regime is a bit of a double‑edged sword – on one hand you can finally trade without banks blocking you, on the other hand the 30% levy is pretty steep. If you’re not careful, the 1% TDS will eat into your small wins. I think the new rules are a step forward, but they definitely defiinitely need some tweaks.
The VDA classification essentially re‑frames crypto as a taxable asset class📊 It strips any notion of legal tender status🚫 and forces you to treat gains as ordinary income😀 This shift triggers the 30% flat levy and eliminates any loss‑set‑off mechanisms💡 In practice, that means every trade is a taxable event, and you need to file ScheduleVDA each FY.