Crypto Taxes India: What You Need to Know About Reporting Crypto in 2025
When you trade or hold crypto taxes India, the mandatory tax obligations for digital asset transactions under Indian law. Also known as cryptocurrency taxation in India, it applies to everyone who buys, sells, or earns crypto — whether you're trading Bitcoin on Binance or staking Ethereum on a local wallet. The Indian government doesn’t treat crypto as currency. It’s classified as a virtual digital asset, any digital representation of value that can be transferred, stored, or traded electronically. And under the Income Tax Act, every profit from crypto trades is taxable at 30% — no deductions, no losses offset, no exemptions.
That 30% tax isn’t the only rule. There’s also a 1% TDS (Tax Deducted at Source) on every crypto trade over ₹10,000. That means even if you’re just swapping one coin for another, the exchange has to withhold 1% of the transaction value and send it to the government. This applies to both centralized and decentralized trades if they’re routed through Indian platforms. And if you’re receiving crypto as income — from a job, airdrop, or staking rewards — it’s treated as ordinary income, taxable at your regular slab rate, not the flat 30%. The key difference? You can’t use losses from one coin to reduce the tax on another, but you can reduce your income tax burden by proving the cost of acquisition.
Many Indian crypto users still think they’re safe if they don’t report. But the government now has direct access to exchange data through the Income Tax Department’s automated systems. Binance, CoinSwitch, and WazirX have been handing over user records since 2022. Even if you use a non-Indian exchange, if you transfer funds to an Indian bank account, that transaction triggers a red flag. The CBDT (Central Board of Direct Taxes) cross-checks bank statements, UPI logs, and crypto wallet addresses. Fines for non-compliance start at ₹10,000 and can go up to 300% of the evaded tax. And yes — they’ve already started prosecuting cases.
So what should you do? Keep a simple record: date, coin, amount bought, price paid, and what you sold it for. Use free tools like Koinly or CoinTracker to auto-import your trades. File your ITR-2 form with Schedule FA for foreign assets. If you’re holding crypto as an investment, treat it like stocks — track your cost basis. If you’re trading daily, treat it like a business. There’s no gray area. The law is clear. And in 2025, the audit risk is higher than ever.
Below, you’ll find real reviews and case studies from Indian crypto users who’ve dealt with exchange shutdowns, regulatory crackdowns, and tax audits. Some lost money. Others learned how to stay compliant. You won’t find fluff here — just what actually happened, and what you need to know before you trade.
- By Eva van den Bergh
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- 6 Dec 2025
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India allows crypto trading but imposes heavy taxes and offers no legal protection. Traders face risks from scams, exchange failures, and sudden policy changes-yet opportunities remain for those who navigate the uncertainty carefully.