Indian crypto tax laws: What you need to know about reporting, rates, and compliance

When you trade or hold cryptocurrency in India, you’re not just dealing with price swings—you’re dealing with the Indian crypto tax laws, a set of rules enforced by the Income Tax Department that treat digital assets as taxable property. Also known as crypto taxation in India, these rules require you to report every sale, swap, or gift of crypto, no matter how small. Unlike some countries that ignore small transactions, India’s system demands full disclosure. If you bought Bitcoin in 2021 and sold it in 2024 for a profit, you owe tax. If you swapped Ethereum for Solana, that’s a taxable event too. There’s no gray area—every transaction counts.

The core of Indian crypto tax laws, a framework introduced in 2022 and updated through 2025 to close loopholes. Also known as crypto taxation in India, these rules require you to report every sale, swap, or gift of crypto, no matter how small. is a flat 30% tax on profits, with no deductions for losses. That means if you lost ₹50,000 on one coin and made ₹80,000 on another, you still pay tax on the full ₹80,000. Plus, there’s a 1% TDS (tax deducted at source) on every trade over ₹10,000, taken automatically by exchanges like WazirX or CoinSwitch. This isn’t optional. The IT department now cross-checks data from exchanges, wallet analytics, and bank statements. If your bank shows a ₹2 lakh deposit from a crypto platform and you didn’t report it, you’re flagged.

What about airdrops and staking rewards? They count as income when you receive them, taxed at your slab rate. If you got 100 tokens worth ₹5,000 in an airdrop, that’s ₹5,000 of taxable income—even if you never sold them. Same goes for staking rewards. And if you gift crypto to a friend? The recipient pays tax when they sell. The giver? They don’t get a deduction. This isn’t like gifting cash—it’s treated like transferring an asset. The IT department crypto, India’s tax authority that uses data-sharing agreements with exchanges and blockchain analytics firms to track user activity. Also known as Income Tax Department, it has been actively auditing high-volume traders since 2023. doesn’t care if you used a non-KYC wallet. If your wallet address shows up in a transaction linked to a registered exchange, they’ll find you.

People still think they can avoid this by using P2P platforms or foreign exchanges. But India’s rules apply to you as a resident, no matter where the trade happens. If you’re living in Mumbai and bought crypto on Binance, you still owe tax. The only way out is to report accurately and keep records—every transaction date, amount, value in INR, and wallet address. You need this for your ITR filing, even if you’re not a day trader. One missed entry can trigger a notice. And with crypto seizure cases rising in India, the government isn’t just collecting tax—they’re building a case for enforcement.

Below, you’ll find real breakdowns of how Indian crypto tax laws affect everyday traders, what exchanges report to the government, and how to avoid costly mistakes. No theory. No guesswork. Just what you need to stay on the right side of the law.