What counts as a VDA

The law defines a VDA as any information, code, number or token, other than currency, that represents value and that you can transfer, store or trade electronically. NFTs are VDAs. The Government can add or exclude assets by notification. From 1 April 2026, the definition also names any crypto-asset that uses a cryptographically secured distributed ledger or similar technology.

The department's VDA guide lists items that are not VDAs. Examples are Indian and foreign currency, CBDC, NFTs of physical assets, gift cards, vouchers, loyalty points and app subscriptions.

Crypto tax rate in India: 30% plus surcharge and cess

Income from the transfer of any VDA is taxed at a flat 30%. The rate is the same when the income is capital gains or business income.

• You can deduct only the cost of acquisition. No other expense or allowance is allowed. The law does not say if exchange fees are part of the cost.
• A VDA loss cannot be set off against any other income. You cannot carry it forward to a later year.
• Schedule VDA enters each loss as nil. A loss on one coin therefore does not reduce a gain on another coin.

A 4% Health and Education Cess applies to the tax plus surcharge. With cess and no surcharge, the effective rate is 31.2%. For AY 2026-27, an individual outside the new regime pays a surcharge on VDA tax of 10% above ₹50 lakh total income, 15% above ₹1 crore, 25% above ₹2 crore and 37% above ₹5 crore. We could not confirm the surcharge rate for the new regime.

The law text that we read sets no minimum gain for the 30% rate. The money limits in the VDA rules apply to TDS and to gifts.

Example: tax on one crypto sale

Assume that you are a resident with salary income. In FY 2025-26, you sell a coin on an Indian exchange for ₹3,00,000. You bought it for ₹2,00,000. You also sell a token at a loss of ₹40,000. We leave surcharge out of the example. For an individual outside the new regime, surcharge starts above ₹50 lakh of total income.

The ₹40,000 loss goes in Schedule VDA as nil. The loss does not reduce the ₹1,00,000 gain. If the exchange also deducted TDS on the loss sale, you claim that credit too.

Crypto TDS: 1% rate, limits and who deducts

A person who pays a resident for a VDA must deduct 1% of the amount as income tax. The deduction happens at credit or at payment, whichever is earlier. Payments to a non-resident fall under a different TDS section (section 195).

No TDS applies below these totals in one financial year:

• ₹50,000 when the payer is a "specified person": an individual or HUF with no business income, or with business turnover up to ₹1 crore (₹50 lakh for a profession) in the year before.
• ₹10,000 for any other payer.

When an exchange pays the seller, the exchange deducts. In an OTC deal where the buyer and seller know each other, the buyer deducts. With a broker, both can be liable unless a written agreement puts the duty on the broker. In a crypto-to-crypto trade, the payer must make sure the tax is paid before it releases the coins.

TDS is not your final tax. You claim it as a credit in your return. The e-filing system flags a return when VDA TDS shows in your tax credit data but the VDA income is not fully reported.

Crypto gifts, staking, mining and airdrops

A VDA that you receive as a gift is income for you if the total fair market value of such gifts in the year is more than ₹50,000. Then the full value is taxable, not only the part above ₹50,000. Gifts from relatives, on marriage, or by will or inheritance are exempt. When you later sell a gifted VDA, your cost is the amount already taxed as a gift. In other cases, it is the cost to the previous owner.

We could not confirm official guidance on how India taxes staking rewards, mining income or airdrops when you receive them. When you later sell those coins, the 30% rule applies to the sale.

Schedule VDA in ITR-2 and ITR-3, and the 2026 last dates

Use ITR-2 if you have no business or professional income. Your VDA income goes in Schedule VDA and flows to Schedule CG. Use ITR-3 if you have business income. In ITR-3, each row can be taxed as "Business" or "Capital Gain". ITR-1 and ITR-4 have no Schedule VDA, so you cannot use them for crypto.

Schedule VDA needs one row for each transfer. Each row shows the date of acquisition, the date of transfer, the head of income, the cost of acquisition, the consideration received and the income. The dates cannot be after 31 March of the financial year.

A revised return filed after 31 December 2026 for AY 2026-27 carries a fee under section 234-I. We found no extension of the 31 July 2026 date as of 25 Oct 2026.

The Income-tax Act, 2025: new section numbers

The Income-tax Act, 2025 came into force on 1 April 2026 and replaced the 1961 Act. CBDT says that the new Act does not change the underlying tax policy. Income from FY 2025-26 still falls under the 1961 Act. Income from 1 April 2026 falls under the 2025 Act, which uses "tax year" in place of "previous year".

Prescribed reporting entities must file statements on crypto-asset transactions with the tax department. A late statement costs the entity ₹200 per day. Wrong information can bring a ₹50,000 penalty. From 1 October 2026, an individual or HUF payer who meets the "specified person" test does not need a TAN to deduct VDA TDS under the new Act.

This guide is general information, not tax advice. For your own case, talk to a chartered accountant.