Cryptocurrency Tax India: What You Owe, How to File, and Real Risks

When you buy, sell, or trade cryptocurrency, a digital asset that operates independently of banks and is recorded on a blockchain. Also known as crypto, it in India, the government treats it like property—not currency. That means every trade, swap, or sale triggers a taxable event. Since April 2022, India has imposed a flat 30% tax on crypto gains, with no deductions for losses. No exceptions. No offsets. If you made money on Bitcoin, Ethereum, or even a meme coin like Michi, you owe tax—even if you never cashed out into rupees.

The Income Tax Department, India’s federal agency responsible for collecting and enforcing direct taxes tracks crypto through exchange data, bank deposits, and voluntary disclosures. If you bought crypto on Binance, CoinSwitch, or WazirX and moved funds to your bank account, that transaction leaves a trail. Even airdrops like ASK or HERO are taxable as income at their market value the day you received them. And if you mined crypto or earned interest through DeFi platforms like SushiSwap, that’s also income. The rules are clear: no reporting = penalties. Fines can hit up to 200% of the tax due, plus legal action under the Income Tax Act.

What about losses? They don’t matter. If you bought AMATERAS for ₹50,000 and it dropped to ₹500, you can’t use that loss to reduce your tax on a profitable Solana trade. Unlike stocks, crypto losses can’t be carried forward. You pay 30% on every profit, no matter how small. And don’t forget the 1% TDS—every time you sell crypto on an Indian exchange, they withhold 1% automatically. That’s extra money gone before you even see your balance.

People think they can hide crypto by using P2P platforms or overseas exchanges. But if your bank account suddenly gets a ₹2 lakh deposit from a crypto sale, the tax department will ask questions. And if you’re running a crypto business—like trading as a full-time job or running a node—you might even be classified as a professional trader, which opens the door to higher scrutiny. The crypto regulatory landscape, the set of rules and enforcement practices governing digital asset use in a country in India isn’t about banning crypto—it’s about controlling it. Every trade, every wallet, every transfer is fair game for audit.

You don’t need to be a tax expert to stay compliant. Start by tracking every transaction: buys, sells, swaps, airdrops, staking rewards. Use free tools like Koinly or CoinTracker to auto-calculate your gains. Save your transaction IDs and wallet addresses. File your ITR-3 or ITR-4 if you’re trading actively. And if you’re unsure? Get help from a CA who’s handled crypto cases before—not just any accountant. The cost of a mistake is far higher than the cost of advice.

Below, you’ll find real breakdowns of crypto projects, exchange reviews, and regulatory updates—all tied to how taxes, risks, and reporting affect your bottom line in India. No theory. No guesswork. Just what you need to know before you trade again.