Crypto tax in India, by the text of sections 115BBH and 194S and the 2025 Act that replaced them
Crypto tax in India: the 30% rate and 1% TDS
India taxes income from transferring crypto at a flat 30% under section 115BBH, allowing only the cost of acquisition and no set-off of losses. Section 194S takes 1% TDS on transfers above Rs 10,000 a year, or Rs 50,000 for a specified person. From 1 April 2026 both rules sit in the Income-tax Act 2025.
Piece published Reviewed by CryptoGuardz Register Desk, editorial desk
India taxes income from selling or swapping crypto at a flat 30%, plus cess and surcharge where they apply, and allows no deduction except the cost of acquisition. Losses cannot be set off or carried forward. On top of that, 1% of the sale value is withheld as TDS once a seller's transfers pass Rs 10,000 in a financial year, or Rs 50,000 for a specified person.
Those rules were written into the Income-tax Act 1961 as sections 115BBH and 194S. That Act was repealed on 1 April 2026 and replaced by the Income-tax Act 2025, which carries the same 1% TDS rate under new section numbers. This page reads the Income Tax Department's own texts. It is not tax advice; a chartered accountant reads your return, not a blog.
What is the crypto tax rate in India?
Thirty per cent, flat. Section 115BBH(1), as published by the Income Tax Department, says that where total income "includes any income from the transfer of any virtual digital asset", the tax payable is calculated on that income "at the rate of thirty per cent". The footnote records that the section was "inserted by the Finance Act, 2022, w.e.f. 1-4-2023". It does not matter whether the holder is a trader or a long-term investor, or how long the coin was held. There is no lower rate for holding periods and no basic exemption limit inside the section. Whether cess and surcharge apply on top depends on the taxpayer's total income and is not computed here.
Can you offset crypto losses in India?
No. This is the clause that hurts. Section 115BBH(2) reads:
(b) no set off of loss from transfer of the virtual digital asset computed under clause (a) of sub-section (1) shall be allowed against income computed under any provision of this Act to the assessee and such loss shall not be allowed to be carried forward to succeeding assessment years.
Clause (a) of the same sub-section bars any deduction for "any expenditure (other than cost of acquisition, if any) or allowance". So exchange fees, internet bills and software subscriptions do not reduce the taxable figure.
What that means in rupees, by arithmetic on the section:
| Trade | Result | Taxed at 30% | Tax |
|---|---|---|---|
| Coin A sold for Rs 2 lakh, cost Rs 1 lakh | Gain Rs 1 lakh | Rs 1 lakh | Rs 30,000 |
| Coin B sold for Rs 50,000, cost Rs 1.5 lakh | Loss Rs 1 lakh | Nil, no set-off | Nil |
| Year total | Net nil | Rs 1 lakh | Rs 30,000 |
A trader who broke even across the year still owes Rs 30,000 before cess.
How does the 1% TDS on crypto work?
The buyer, or the exchange that pays the seller, withholds 1% of the consideration. Section 194S(1) applies to any person paying a resident "any sum by way of consideration for transfer of a virtual digital asset" and sets the deduction at "one per cent of such sum as income-tax thereon." The thresholds in sub-section (3):
| Payer | No TDS if yearly consideration does not exceed | Source |
|---|---|---|
| Specified person | Rs 50,000 | s.194S(3)(a) |
| Any other person | Rs 10,000 | s.194S(3)(b) |
| Seller with no PAN | Rate rises to 20% | s.206AA, per department page |
A specified person is an individual or HUF whose business turnover did not exceed one crore rupees, or whose professional receipts did not exceed fifty lakh rupees, in the previous year, or who has no business or professional income at all.
The department's TDS explainer, which describes itself as "for information purposes only", says that where an exchange pays the seller directly "the exchange shall be liable to deduct tax at source." Where a broker sits between them, both are liable unless a written agreement puts the duty on the broker, and the exchange then files a quarterly statement in Form 26QF. The page cites CBDT Circular No. 13 dated 22 June 2022 on converting tax withheld in kind. The circular's own text was not fetched: not verified.
TDS is not an extra tax. It is credited against the seller's final liability, which is the 30%. Its real effect is a record: every withholding goes to the department under the seller's PAN.
What changed on 1 April 2026?
The section numbers, and the vocabulary. The Income-tax Act 2025 came into force on that date; its section 1(3) says so, and the department's transition FAQs say "The 1961 Act stands repealed on the 01.04.2026." FAQ 1.12 says income "earned during the FY 2025-26 will be governed by the Income-tax Act, 1961 and assessed in AY 2026-27." The new Act also drops "previous year" for "tax year", which FAQ 1.9 defines as "a period of twelve months contained in a financial year."
| Rule | 1961 Act | 2025 Act | Status |
|---|---|---|---|
| 30% tax on crypto income | s.115BBH | s.194, Table S. No. 4 | From the department's navigator, based on the draft bill |
| 1% TDS on transfer | s.194S(1) | s.393(1), Table S. No. 8(vi) | Read on the department's section 393 page |
| TDS thresholds | s.194S(3) | s.393(4), Table S. No. 12 | Rs 50,000 and Rs 10,000, read on the same page |
| Definition of crypto | not read | s.2(111) | Read in the 2025 Act text |
The section 393 page gives the nature of payment as "Any sum by way of consideration for transfer of a virtual digital asset" and the rate as 1%. The department's navigator maps section 115BBH to section 194, Table S. No. 4, but labels its column "Section number as per latest draft". The full 2025 Act served by the department truncated in extraction at around section 15, so the final wording of the 30% charge in the enacted text was not read: not verified. Nothing in the pages read suggests the rate or the loss rule changed.
What do exchanges do with Indian users' tax?
The register has three Indian exchanges, added on 9 October 2026, and none of their documents as recorded mentions TDS or section 194S: no data. What they do record is the registration and the gambling line.
| Exchange | Entity per own documents | FIU-IND registration claimed | Gambling clause |
|---|---|---|---|
| CoinDCX | Neblio Technologies Private Limited | VA00030982 | Prohibits "Gambling-related activities" |
| WazirX | Zanmai Labs Private Limited | VA00031068 | Not disclosed |
| ZebPay | Awlencan Innovations India Limited | Not claimed in documents read | Prohibits "gambling;" in clause 7(a) |
None of the claimed numbers was confirmed against an FIU-IND list, which the register could not read. The register's search of FIU-IND's compliance orders page on 9 October 2026 found 126 orders from 2013 to 30 December 2025, naming four crypto businesses: Coinbase India Private Limited, Bybit Fintech Limited, Binance and Peken Global Ltd. (KuCoin).
The offshore side is enforcement. FIU-IND sent show cause notices on 28 December 2023 to nine offshore exchanges, seven of which the register tracks: Binance, KuCoin, HTX, Kraken, Gate, Bitstamp and MEXC. In January 2025 it fined Bybit Rs 9.27 crore for serving India "without securing mandatory registration with the FIU-IND".
Whether an offshore platform withholds Indian TDS or files Form 26QF is not stated in any release or record read: not measured. That does not move the tax. Section 194S puts the deduction duty on the payer, and section 115BBH charges the seller either way. A trader on a platform that does not withhold still has the 30% liability, with no third-party TDS record behind the figures. The legal background is in is crypto legal in India.
Two of the three Indian exchanges also bar gambling use outright. ZebPay's consequence clause, 7(b), says it "shall, without prior notice, have the right to disable your access to the Client Asset Account at any time". How exchanges treat transfers to casinos generally is in exchange to casino deposits.
Are crypto casino winnings taxed the same way?
Not under these two sections. Winnings from games are covered by other provisions of the Income-tax Act that were not read for this page: not verified. Two things follow from 115BBH regardless. Converting a coin to deposit it is a transfer of a virtual digital asset, and swapping withdrawn coins back into rupees is another. The gaming question itself is governed by the 2025 Online Gaming Act, which prohibits offering online money games; see India's Online Gaming Act 2025 and the India country page.
What this does not show
Cess, surcharge and the slab interaction are not computed. The enacted text of the 2025 Act's charging section was not read. CBDT Circular No. 13 of 2022 was not fetched. Which exchanges withhold TDS for Indian users today is not measured.
Quick answers
What is the crypto tax rate in India?
A flat 30% on income from transferring crypto under section 115BBH, before cess and surcharge. Only the cost of acquisition is deductible.
Can I set off crypto losses against gains in India?
No. Section 115BBH(2)(b) bars set-off against any income, including other crypto gains, and bars carrying the loss forward.
When does 1% TDS apply to crypto in India?
When yearly consideration passes Rs 10,000, or Rs 50,000 if the payer is a specified person. Without a PAN the rate is 20%. See the exchange register.
Did the Income-tax Act 2025 change crypto tax?
It moved the TDS to section 393(1), Table S. No. 8(vi), still at 1%, from 1 April 2026. FY 2025-26 income stays under the 1961 Act.
Where can I get help with gambling in India?
Gambling Therapy offers free international support at gamblingtherapy.org. More options are on the responsible gambling page.
Sources
- Income Tax Department, Income-tax Act 1961 section 115BBH, retrieved 9 October 2026
- Income Tax Department, Income-tax Act 1961 section 194S, retrieved 9 October 2026
- Income Tax Department, TDS on payment for the transfer of virtual digital assets, retrieved 9 October 2026
- Income Tax Department, Income-tax Act 2025 section 393, retrieved 9 October 2026
- Income Tax Department, section navigator from the Income-tax Act 1961 to the Income-tax Bill 2025, retrieved 9 October 2026
- Income Tax Department, FAQs on the transition to the Income-tax Act 2025, retrieved 9 October 2026
- Income-tax Act 2025 as amended by the Finance Act 2026, Income Tax Department, read in part, retrieved 9 October 2026
- PIB, FIU IND issues compliance show cause notices to nine offshore VDA SPs, 28 December 2023, retrieved 9 October 2026
- PIB, FIU-IND imposes monetary penalty on Bybit Fintech Limited, 31 January 2025, retrieved 9 October 2026
- CryptoGuardz exchange register, CoinDCX, WazirX and ZebPay records and FIU-IND compliance orders search, retrieved 9 October 2026
- FIU-IND compliance orders page, as searched by the register, retrieved 9 October 2026
- Gambling Therapy
About this piece
Compiled by the CryptoGuardz register team from the sources listed above. Research and drafting are AI-assisted and reviewed by a named editor before publication. Nothing here is a recommendation to gamble. If a figure or a reading is wrong, tell us and the correction is logged in public.