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Crypto and VDA taxation: every question, answered

30% tax, 1% TDS, losses, gifts, foreign exchanges and reporting virtual digital assets.

Last updated 2026-06-12 · Covers FY 2025-26 and FY 2026-27

Plain-language answers, reviewed for publication.

Each question has a shareable anchor, a verdict-first answer, and links into the calculators, calendar, glossary or sibling guide pages where relevant.

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  1. A · Tax rate and scope
  2. B · TDS and exchanges
  3. C · Losses and expenses
  4. D · Gifts and reporting

A · Tax rate and scope

1What counts as a virtual digital asset?

Crypto reporting should be exchange-statement driven. Keep trade history, deposits/withdrawals, wallet transfers, TDS reports and valuation support, especially for foreign platforms.

2Is crypto taxed at 30% in India?

Crypto/VDA gains are generally taxed under the special VDA regime, not normal slab rates. The headline tax is 30% on gains, with limited deductions. Check the asset classification and transaction year.

3Does the slab rate ever apply to crypto gains?

Crypto/VDA gains are generally taxed under the special VDA regime, not normal slab rates. The headline tax is 30% on gains, with limited deductions. Check the asset classification and transaction year.

B · TDS and exchanges

4How does 1% crypto TDS work?

1% VDA TDS is a transaction-level compliance mechanism, not final tax. Indian exchanges may deduct/report it; foreign exchanges may not. Reconcile exchange statements with AIS/26AS and self-report missing taxable transactions.

5What if I traded on a foreign exchange with no TDS?

1% VDA TDS is a transaction-level compliance mechanism, not final tax. Indian exchanges may deduct/report it; foreign exchanges may not. Reconcile exchange statements with AIS/26AS and self-report missing taxable transactions.

6Where do I see crypto TDS in 26AS or AIS?

1% VDA TDS is a transaction-level compliance mechanism, not final tax. Indian exchanges may deduct/report it; foreign exchanges may not. Reconcile exchange statements with AIS/26AS and self-report missing taxable transactions.

C · Losses and expenses

7Can crypto losses be set off against other gains?

VDA loss set-off is heavily restricted. Loss from one VDA transaction generally cannot be set off against other income, and deductions beyond cost of acquisition are limited. Carry-forward is also restricted.

8Can I deduct exchange fees or internet costs?

1% VDA TDS is a transaction-level compliance mechanism, not final tax. Indian exchanges may deduct/report it; foreign exchanges may not. Reconcile exchange statements with AIS/26AS and self-report missing taxable transactions.

9Can I carry forward VDA losses?

VDA loss set-off is heavily restricted. Loss from one VDA transaction generally cannot be set off against other income, and deductions beyond cost of acquisition are limited. Carry-forward is also restricted.

D · Gifts and reporting

10Is gifted crypto taxable?

Gifted crypto can be taxable for the recipient unless an exemption applies. Relative, occasion and value rules need checking, and later sale needs cost/holding documentation.

11How do I report crypto in the ITR?

Crypto reporting should be exchange-statement driven. Keep trade history, deposits/withdrawals, wallet transfers, TDS reports and valuation support, especially for foreign platforms.

12Do I disclose foreign exchange wallets as foreign assets?

1% VDA TDS is a transaction-level compliance mechanism, not final tax. Indian exchanges may deduct/report it; foreign exchanges may not. Reconcile exchange statements with AIS/26AS and self-report missing taxable transactions.

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This guide is general information for understanding the topic, not advice on your specific situation, and not solicitation of work. Tax positions turn on your full facts and on the law in force for the relevant year. Confirm your position with a qualified professional before acting.