VDAs Tax India: What You Need to Know About Crypto Tax Rules in India

When you trade or hold Virtual Digital Assets (VDAs), a legal category in India that includes cryptocurrencies, NFTs, and other digital tokens. Also known as digital assets, it is treated as property for tax purposes, not currency. Since April 2022, India has imposed a flat 30% tax on gains from VDAs — no deductions, no losses carried forward, and no exemption for long-term holdings. This isn’t just about Bitcoin or Ethereum. It covers every token you buy, sell, swap, or receive as a reward.

The rules apply whether you’re trading on WazirX, CoinDCX, or a decentralized exchange. Even receiving crypto as a gift or airdrop counts as income — taxed at your marginal rate. If you mine crypto, the value at the time you receive it is taxable. Staking rewards? Taxable. Swapping one token for another? Taxable. There’s no "free" crypto in India’s eyes. The government tracks transactions through exchange reporting, and banks flag crypto-related transfers. Failure to report can trigger penalties, interest, or worse — a tax notice with no room for appeal.

What makes this even trickier is that losses don’t offset gains. If you lose ₹5 lakh on Solana but make ₹8 lakh on Bitcoin, you still pay 30% on the full ₹8 lakh. No deductions for transaction fees, wallet costs, or gas charges. And if you send crypto to a friend? That’s a taxable event — the sender pays tax on the fair market value at the time of transfer. It’s unlike any other asset class in India.

There’s no official guidance on how to calculate cost basis for multiple purchases. Most users use FIFO (first in, first out), but the law doesn’t specify. Record keeping is your only protection. You need dates, amounts, exchange names, and transaction IDs — not screenshots, but logs. Apps like Koinly or CoinTracker help, but they’re not legal proof. The Income Tax Department doesn’t care if you used a foreign exchange. If you’re an Indian resident, your global crypto activity is taxable.

And it’s not just individuals. Startups issuing tokens, DeFi protocols, and even NFT marketplaces are now under scrutiny. The government has asked exchanges to share KYC data with the tax authority. If you’re using a non-Indian platform like Binance or Kraken, you’re still required to report. The crackdown isn’t coming — it’s already here. In 2023, over 12,000 crypto-related tax notices were issued. Most were for unreported gains under ₹10 lakh — small amounts, but still illegal.

What you’ll find below are real cases, clear breakdowns, and hard truths about how crypto taxes work in India. No fluff. No guesses. Just what’s actually happening on the ground — from traders who got hit with notices to people who avoided trouble by doing it right. Whether you’re holding a few tokens or running a mining rig, these posts show you exactly where the risks lie — and how to stay safe.