Cryptocurrency Tax India: What You Owe and How to Stay Compliant

When you buy, sell, or trade cryptocurrency, a digital asset that operates on blockchain networks and is subject to financial regulation in many countries. Also known as crypto, it's treated as property for tax purposes in India, not currency. That means every time you trade Bitcoin for Ethereum, sell Solana for INR, or even use crypto to buy goods, you might owe taxes. The Indian government clarified this in 2022, and since then, crypto gains, profits made from selling or exchanging digital assets are taxed at 30% — no deductions, no losses offset. Even crypto airdrops, free tokens received without purchase, often as part of marketing or community rewards count as income when you receive them, not when you sell.

If you earn crypto through staking, mining, or as payment for work, it’s treated as income tax, taxable earnings subject to your regular income slab rates. You must report the fair market value in INR at the time you received it. And yes — if you received a token from a project like DeSpace Protocol’s Space Drop or NFTP, and it had any value when you got it, you owe tax on that value. The government doesn’t care if you didn’t sell it yet. They care that you got it. Plus, there’s a 1% TDS (tax deducted at source) on every crypto trade over ₹50,000 (or ₹10,000 in a single month), whether you made a profit or not. That’s taken by the exchange before you even see your funds. If you’re using foreign exchanges like Asproex or Tidex (even if they’re shut down), you’re still required to report those transactions. The global tracking rules under FATF and the Travel Rule mean your activity isn’t invisible.

Many people think if they don’t cash out to INR, they’re safe. They’re not. Swapping one crypto for another is a taxable event. Holding for years doesn’t get you a lower rate like in the U.S. There’s no long-term vs short-term distinction in India — 30% applies no matter what. And if you lost money? Too bad. You can’t use those losses to reduce your tax bill on other trades. The rules are strict, and the enforcement is getting tighter. Banks are now flagged for crypto-related transfers, and the Income Tax Department is cross-checking wallet addresses with exchange data. You don’t need to be a trader to be affected. If you ever bought Bitcoin, claimed an airdrop, or used crypto to pay for anything, you’re in scope.

What you’ll find below are real cases, clear breakdowns, and hard truths about crypto taxes in India — from how to track your trades without expensive software, to what happens if you ignore the rules, to why some projects you thought were free tokens actually cost you in taxes. No fluff. No theory. Just what you need to know before you file.