As TaxScan recently reported, some global crypto exchanges began charging 18% GST on service fees for Indian users, adding a new layer of tax compliance for traders. This reflects how closely authorities are now monitoring digital asset activity.

For many investors, the difficulty begins when tax season arrives. Buying and selling crypto is simple. Filing it correctly in the income tax return is not. Between 30% tax on gains, 1% TDS on transactions, and reporting requirements for Virtual Digital Assets, even experienced investors often struggle to determine what must be declared and how.

Understanding how to file crypto tax in India has therefore become essential for managing digital asset investments. This guide explains the rules, the filing process, and the steps investors should follow to report crypto transactions correctly.

Key Takeaways:

• VDA Tax Rule: Cryptocurrency in India is classified as a Virtual Digital Asset, with gains taxed at 30% plus applicable cess, while 1% TDS may apply to eligible transfers under Section 194S.

• Accurate Records: Crypto tax filing begins with complete transaction data across exchanges, wallets, and DeFi platforms, including trade history, TDS certificates, and reconciled records from Form 26AS and AIS.

• Gain Calculation: Investors typically calculate gains using the FIFO method, matching the earliest purchase price to each sale to determine the cost basis reported on Schedule VDA of the ITR.

• Filing Process: Crypto income must be reported through ITR-2 or ITR-3, where transaction details are disclosed in Schedule VDA and Schedule CG, and any remaining tax liability is paid before submitting and e-verifying the return.

• Strategic Perspective: Leaders such as Ashwinder R. Singh, Vice Chairman and CEO of BCD Group, often highlight that disciplined record-keeping and regulatory awareness remain central to responsible investing in emerging asset classes, such as cryptocurrency.

Step-by-Step Process to File Crypto Tax in India

Filing cryptocurrency taxes in India requires more than simply declaring profits. Investors must organise transaction records, reconcile TDS deductions, calculate gains under the VDA rules, and report them correctly in their income tax return.

Understanding the process helps avoid errors and penalties. The following steps outline how investors typically complete crypto tax filing under the current Indian tax framework.

1.Gather All Crypto Transaction Records

Accurate tax filing begins with complete transaction records. Since crypto activity can occur across multiple exchanges, wallets, and platforms, investors must first compile a complete record of all transactions for the financial year. Missing even small trades or transfers can lead to incorrect gain calculations and reporting errors under Schedule VDA.

Start by organising the following information:

• List all platforms used: Identify every exchange, wallet, DeFi platform, or P2P source used between April 1, 2025, and March 31, 2026.

• Download transaction reports: Export CSV or Excel files from each platform showing buys, sells, swaps, deposits, withdrawals, staking rewards, or mining income.

• Record key transaction details: Ensure each entry includes the date, asset type, quantity, purchase cost, sale value, and transaction fees.

• Collect TDS certificates: Download Form 16A under Section 194S from exchanges or buyers and cross-check it with Form 26AS and AIS on the tax portal.

• Track off-exchange activity: Record DeFi, NFT, or hardware wallet transactions manually and verify them through blockchain explorers if necessary.

• Consolidate records: Import data into crypto tax software to combine transactions and prepare reports aligned with Schedule VDA requirements.

• Verify and store records: Reconcile totals with AIS and Form 26AS, and retain all documents for at least seven years for compliance.

2.Verify Transactions Using Form 26AS and AIS

Before calculating gains, investors should verify their crypto activity against the records reported to the Income Tax Department. Exchanges often report transactions and TDS deductions, so checking Form 26AS and the Annual Information Statement (AIS) helps ensure your filing matches official records.

Follow these steps:

• Log in to the Income Tax portal: Access incometax.gov.in using your PAN and password.

• Download Form 26AS: Go to e-File → Income Tax Returns → View Form 26AS and check TDS entries, especially deductions under Section 194S.

• Download the Annual Information Statement (AIS): Under My Account → AIS, review crypto transactions reported by exchanges for the financial year.

• Compare with your records: Match transaction totals, PAN details, and TDS amounts with the reports exported from exchanges or wallets.

• Resolve discrepancies: If differences appear, contact the exchange for Form 16A or correct the transaction data before filing.

• Keep documentation: Save downloaded statements and screenshots for future verification or tax notices.

Suggested Read: Cryptocurrency's Impact on Real Estate Transactions and Ownership

3.Calculate Crypto Gains and Losses

After verifying transaction records, the next step is calculating gains from crypto trades. Under Indian tax rules, gains from Virtual Digital Assets are taxed at 30% plus applicable cess, and losses cannot be set off against other income.

The FIFO (First-In, First-Out) method is typically used, in which the earliest-purchased assets are considered sold first.

Follow these steps:

• Organise transaction data: List all crypto purchases and sales with dates, quantities, purchase price, sale value, and fees.

• Apply the FIFO method: Match each sale with the earliest unsold purchase to determine the cost basis.

• Calculate the gain: Subtract the acquisition cost from the sale value for each transaction.

• Use crypto tax tools: Import transaction reports into software that automatically applies FIFO and prepares reports for Schedule VDA.

• Verify totals: Recheck the calculated gains against your transaction records before reporting them on the tax return.

4.Select the Correct ITR Form and Start Your Filing

Once crypto gains are calculated, the next step is filing them through the Income Tax portal. Investors must choose the correct return form and report their Virtual Digital Asset transactions under Schedule VDA.

• Choose the appropriate ITR form: Use ITR-2 if crypto income is treated as investment gains. Use ITR-3 if trading activity is considered business income.

• Log in to the e-filing portal: Visit incometax.gov.in, sign in using your PAN and password, and begin filing for the relevant assessment year.

• Start the return: Navigate to e-File → Income Tax Returns → File Income Tax Return, select the online mode, and proceed with the chosen form, where Schedule VDA will appear for reporting crypto transactions.

5.Report Crypto Income in Schedule VDA

Once the return form is selected, investors must report their cryptocurrency transactions in Schedule VDA, which captures details of Virtual Digital Asset transfers under Section 115BBH. Accurate reporting ensures that gains are taxed correctly and matched with records already available to the Income Tax Department.

• Activate Schedule VDA: In ITR-2 or ITR-3, indicate that you have income from Virtual Digital Assets to enable the reporting section.

• Enter transaction details: Provide information such as type of asset, acquisition date, transfer date, quantity, sale value, and cost of acquisition calculated using FIFO.

• Calculate taxable income: The difference between sale value and acquisition cost is treated as VDA income and taxed at 30% under Section 115BBH.

• Complete related schedules: Report totals in Schedule CG, disclose other income if applicable, and claim TDS credits deducted under Section 194S before reviewing the return.

Also Read: How to Buy a House Using Bitcoin or Other Cryptocurrency

6.Calculate, Pay, and Submit the Tax Return

After entering all crypto transaction details, investors must review the final tax calculation and complete the filing process on the Income Tax portal.

• Review tax liability: Check the total VDA income reported in the return. Crypto gains are taxed at 30% plus applicable cess, and any TDS already deducted under Section 194S should be reflected from Form 26AS.

• Pay any remaining tax: If a balance is due, use the Pay Now option on the portal through net banking, UPI, or challan payment and save the transaction reference.

• Submit and verify the return: Preview the ITR, submit it online, and complete e-verification through Aadhaar OTP, net banking, or digital signature within the required time to finalise the filing.

7.Maintain Transaction Records for Future Reference

After filing crypto taxes, investors should retain complete documentation of their transactions and tax filings. Cryptocurrency activity may involve multiple exchanges, wallets, and transfers, so keeping detailed records helps address any future verification requests from tax authorities.

Maintain copies of transaction reports from exchanges, wallet statements, Form 26AS, AIS, TDS certificates, and the filed ITR. These records should include purchase dates, sale values, quantities, and supporting calculations used to determine gains.

Keeping these documents for several years ensures that investors can respond to queries, reconcile past filings, or review historical transactions if required.

Must Read: The Future of Crypto Investing: Discipline, Diversification, BitSave

Once the filing process is complete, a few practical habits can help investors manage crypto tax obligations more efficiently in the future.

Smart Practices for Crypto Tax Compliance

Filing crypto taxes once is not enough. Investors who trade frequently or use multiple exchanges must maintain consistent compliance practices throughout the year. Because crypto transactions are recorded across platforms and often reported to tax authorities, disciplined tracking and clear documentation help prevent reporting errors and future notices.

A few practical habits can help investors maintain better crypto tax compliance.

• Track every transaction:
  Record all crypto activity, including trades, swaps, staking rewards, airdrops, and transfers, along with dates, quantities, INR values, and fees.

• Identify taxable events early:
  Transactions such as selling crypto, token swaps, or using crypto for purchases may trigger taxable gains under India’s VDA tax rules.

• Maintain platform-wise records:
  Keep separate reports for each exchange, wallet, or DeFi platform to simplify reconciliation with AIS and Form 26AS.

• Report all VDA activity:
  Crypto transactions must be disclosed in the ITR under Schedule VDA, including activity on foreign exchanges or P2P platforms.

• Review records periodically:
  Regularly check transaction reports and TDS deductions to ensure they match the data reported on the Income Tax portal.

In investment sectors where regulation and capital decisions intersect, organisations such as BCD Group, with decades of experience across development, funding, and real estate markets, operate within the same regulatory and financial frameworks that shape long-term investment decisions.

A Strategic View on Crypto Tax Compliance: Ashwinder R. Singh

For many investors, the difficulty with cryptocurrency taxation lies not in the headline tax rates but in the mechanics of compliance. In practice, the complexity arises from tracking each transfer and accurately reporting it in tax filings.

This is where Ashwinder R. Singh's perspective becomes relevant. Singh serves as Vice Chairman and CEO of BCD Group, and his career spans banking, financial services, and real estate leadership, including roles at Citibank, ICICI Bank, Deutsche Bank, JLL Residential, and ANAROCK.

His background in capital markets and large-scale investment projects gives him a practical view of how emerging financial assets interact with regulation and taxation. From this strategic lens, crypto compliance is not simply a filing exercise. It reflects a broader discipline in investment decision-making.

Key ideas that shape this perspective include:

• Clear tax rules bring legitimacy to emerging assets
  Defined tax treatment for VDAs signals that digital assets are entering the formal financial system rather than remaining outside regulatory frameworks.

• Record-keeping is central to compliance
  Because crypto tax is calculated transaction-by-transaction, maintaining accurate records across exchanges and wallets becomes essential for investors.

• Regulation and innovation must progress together
  As blockchain and digital assets intersect with sectors such as finance and property markets, tax policy will play an important role in establishing trust and accountability.

• Investment discipline remains the foundation
  Regardless of the asset class, property, equities, or crypto, long-term investors benefit from structured analysis, regulatory awareness, and responsible reporting.

Many of these ideas on disciplined investing and market thinking are explored further in Ashwinder R. Singh’s masterclass, which draws on decades of experience across banking, real estate, and capital markets.

To understand the experience behind these views on regulation, markets, and investment discipline, read Ashwinder R. Singh’s complete biography.

Conclusion

Filing crypto taxes in India requires more than reporting profits. It involves careful record-keeping, correct classification of transactions, and accurate reporting under the VDA rules. Investors who maintain organised transaction data throughout the year and reconcile it with official tax records are far less likely to face errors or compliance issues during filing.

As digital assets become a more established part of investment portfolios, tax discipline will become just as important as market analysis. Staying informed about reporting requirements and maintaining clear documentation can help investors manage their crypto activity with greater confidence.

For more insights on markets, regulation, and investment thinking, subscribe to Ashwinder R. Singh’s newsletter to receive his latest perspectives.

FAQs

1.Do I need to report cryptocurrency on my income tax return in India?

Yes. All cryptocurrency transactions classified as Virtual Digital Assets (VDAs) must be reported in the income tax return under Schedule VDA, even if they occur on foreign exchanges or peer-to-peer platforms.

2.Which ITR form should be used to file crypto taxes in India?

Most investors use ITR-2 if crypto is treated as an investment. If crypto trading is considered a business activity, the income must be reported using ITR-3.

3.How are crypto gains taxed in India?

Profits from the transfer of cryptocurrency are taxed at a flat 30% rate under Section 115BBH, plus applicable cess. Losses from crypto transactions cannot be offset against other income.

4.What is the 1% TDS rule on cryptocurrency transactions?

Under Section 194S, a 1% Tax Deducted at Source (TDS) may apply when crypto is transferred above the specified thresholds. This TDS appears in Form 26AS and can be claimed as a credit while filing the tax return.

5.What happens if crypto transactions are not reported in the ITR?

Failure to disclose cryptocurrency transactions may lead to notices from the Income Tax Department, especially if exchange data reported in AIS or Form 26AS does not match the information filed in the tax return.