Under the Income-tax Act, 1961, taxation of crypto assets is governed by Section 115BBH and related provisions.
1️⃣ Flat 30% Tax on Gains
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30% tax on income from transfer of Virtual Digital Assets (VDA) (including cryptocurrency, NFTs, etc.).
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No deduction allowed except cost of acquisition.
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No set-off of losses against any other income.
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No carry forward of losses.
📌 Example:
If you buy Bitcoin for ₹1,00,000 and sell for ₹1,50,000
→ Profit = ₹50,000
→ Tax = 30% of ₹50,000 = ₹15,000 (+ surcharge & 4% cess)
2️⃣ 1% TDS on Sale (Section 194S)
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1% TDS on transfer consideration.
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Applicable if transaction value exceeds:
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₹50,000 (specified persons)
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₹10,000 (others)
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TDS is deducted at the time of payment/credit.
3️⃣ Gift of Cryptocurrency
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Taxable in the hands of recipient (if value exceeds ₹50,000), except when received from specified relatives.
4️⃣ Mining Income
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Taxable at normal slab rates when received.
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On sale, 30% tax applies on entire sale value (since cost of acquisition is considered NIL).
Important Points
✔ No benefit of long-term/short-term capital gains classification
✔ No indexation benefit
✔ Applicable from FY 2022-23 onwards