Simple explanation of VDA rules, 30% tax, 1% TDS, and how to stay compliant in 2026.
Since 2022, the Indian government treats cryptocurrencies as Virtual Digital Assets (VDAs). The rules are strict: 30% flat tax on profits with very limited deductions.
Any profit from selling, transferring, or using crypto is taxed at 30% (plus surcharge & cess). Losses can only offset other VDA gains.
1% tax is deducted at source on most VDA transfers above ₹50,000 per year. This is advance tax, not your final liability.
You bought 0.5 BTC for ₹15,00,000
You sold it for ₹28,00,000
Profit = ₹13,00,000
Tax @ 30% ≈ ₹3,90,000 (plus surcharge & cess)
Note: 1% TDS would have been deducted at the time of sale.
Crypto is fully taxable in India. Pay honestly, keep proper records, and treat it like any other asset. Compliance saves you from bigger problems later.