Crypto Tax in India 2026: New Reporting Rules, Tax Rates and TDS

Crypto Tax in India 2026: New Reporting Rules, Tax Rates and TDS

Updated: 27 October 2026

If you buy, sell or trade Bitcoin, Ethereum, NFTs or other crypto assets, understanding your tax obligations is important. India’s Income-tax Act, 2025 came into effect on 1 April 2026, introducing a new framework that includes reporting requirements for specified crypto-asset service providers.

For investors, this makes accurate transaction records, correct tax reporting and reconciliation of tax deducted at source (TDS) especially important.

1. What changed for crypto reporting in 2026?

Section 509 of the Income-tax Act, 2025, read with Rules 242 to 244 of the Income-tax Rules, 2026, establishes reporting and due-diligence requirements for prescribed crypto-asset service providers.

These requirements cover relevant transactions from calendar years beginning on or after 1 January 2026. Depending on the applicable rules, service providers may need to identify reportable users, obtain information about their tax residency and report specified transaction details to the tax authorities.

Important: These reporting obligations apply to the prescribed reporting entities. They do not mean every individual crypto investor must personally submit the same transaction statement.

2. How is crypto income taxed in India?

Under Section 194 of the Income-tax Act, 2025, income from the transfer of a virtual digital asset (VDA) is generally subject to a 30% tax rate, plus applicable surcharge and cess.

The rules restrict deductions to the cost of acquisition, where applicable. Other expenses and allowances are generally not deductible when computing this income, and losses from VDA transfers cannot be set off against other income or carried forward under these provisions.

Crypto assets and NFTs may fall within the VDA framework, depending on the nature of the asset and applicable definitions. The treatment of a particular transaction should be checked before filing.

3. What does the 1% crypto TDS rule mean?

Section 393 of the Income-tax Act, 2025 provides for 1% TDS on specified payments for transfers of virtual digital assets to residents. The rules include thresholds of ₹50,000 for qualifying specified individual or HUF payers and ₹10,000 for other payers.

TDS is not the same as your final income-tax liability. Keep the relevant tax deduction details and reconcile eligible TDS credits when preparing your return.

4. Which crypto records should you keep?

Maintain a clear record of your transactions, especially if you use multiple exchanges or personal wallets.

• Exchange transaction histories and downloadable trade statements
• Dates of acquisition and transfer, quantities and transaction values
• Purchase-cost records and sale or transfer proceeds
• Wallet addresses and transaction IDs for blockchain transfers
• TDS certificates, tax-credit information and relevant bank statements
• Records supporting transfers between wallets that you own

Keep evidence that helps distinguish a sale or swap from a transfer between your own wallets. Do not assume every movement of crypto has the same tax treatment.

5. What should crypto investors do now?

Check that your exchange account details and tax-residency information are accurate. Download transaction reports before data becomes difficult to access, reconcile TDS information, and review transactions across all platforms and wallets.

Also confirm the correct tax year, applicable income-tax provisions and return requirements. The Income-tax Act, 2025 applies from 1 April 2026, so earlier section numbers and filing guidance may not apply in the same way to every tax year.

Need help reporting crypto income?

Crypto transactions can become complicated when you trade across platforms, receive assets through different routes or have incomplete transaction records. Chaludiya & Co can help you review your income-tax filing requirements and related compliance.

Learn more about our Income Tax Return filing services.

Official references

• Income Tax Department: Income-tax Act, 2025 and guidance notes
• Section 194: Tax on certain incomes, including VDA transfers
• Section 393: Tax deducted at source
• Section 509: Crypto-asset transaction reporting

Disclaimer: This article is for general information only and is not individual tax advice. Tax treatment depends on the nature of the transaction, applicable tax year, residential status and relevant law. Consult a qualified tax professional about your circumstances.