Schedule VDA (Crypto Tax)

Crypto trading in India is taxed under a separate regime introduced in Budget 2022 and codified as Section 115BBH. Returns must be disclosed in Schedule VDA (Virtual Digital Assets) of your ITR. The rules are unusually harsh compared to every other asset class in India, so read this section before you next press the Buy button.

The four rules that matter

1. Flat 30% tax on gains. No slab benefit, no indexation, no long-term concession. A ₹1 lakh gain costs ₹30,000 in tax plus surcharge plus 4% cess - same whether you held for one minute or three years.

2. Losses cannot be set off against anything.Not salary, not other crypto gains, not F&O, not capital gains. A ₹5,00,000 BTC loss is a real loss to your bank account, but it doesn’t reduce your taxable income by a single rupee.

3. Losses cannot be carried forward.Unlike F&O (8 years) or speculative (4 years), VDA losses die at the end of the financial year. Last year’s ₹5,00,000 loss is gone - it can’t offset this year’s gain.

4. 1% TDS on every transaction.Indian exchanges deduct 1% TDS on every sell above ₹10,000 (₹50,000 for “specified persons” like salaried individuals). The TDS shows up in your 26AS and is credited at filing, but it evaporates working capital throughout the year.

What “VDA” covers

Crypto (BTC, ETH, all alts), NFTs, and other digital tokens specified by the government. Wrapped or staked assets, airdrops, and yield-farming rewards are taxed when received at fair market value, and again as a capital event when sold.

What to track per trade

Date and time of buy and sell, asset, quantity, INR-equivalent at the moment of each event, exchange used, TDS deducted. Tag any non-INR pairs because the cost basis conversion is non-trivial. If you trade across CoinDCX, Binance, and a hardware wallet, you’ll regret not journaling each move when the assessment notice arrives.