Crypto Tax India: Rules, Risks, and What You Must Know

When you buy, sell, or trade cryptocurrency, digital assets like Bitcoin or Ethereum that are treated as property for tax purposes. Also known as digital currency, it in India, the government sees it as a taxable asset—not money. That means every trade, swap, or sale could trigger a tax bill. Whether you made a profit on Solana, lost money on a meme coin, or earned tokens from an airdrop, the Income Tax Department is watching. And if you skipped reporting, you’re risking penalties, audits, or even legal trouble.

India’s crypto tax rules are strict and simple: 30% tax, a flat rate applied to all crypto gains, with no deductions for losses. You can’t offset losses from one coin against profits from another. Even if you traded Bitcoin for BNB, that’s a taxable event. Plus, there’s a 1% TDS, a deduction taken at the source by exchanges like Binance or CoinSwitch when you sell. That’s money taken out before you even see your cash. And yes, it applies to every trade, no matter how small. If you got $50 in PEPLO or $200 in BSOL from an airdrop, you still need to report it at its value when you received it. No exceptions.

Reporting isn’t optional. You must declare crypto income under capital gains or business income on your ITR-2 or ITR-3 form. If you’re trading frequently, the tax department may treat you as a business—meaning you lose the benefit of lower long-term rates and face higher scrutiny. The rules changed in 2022, and since then, thousands have been flagged for non-compliance. Even if you used a foreign exchange like Kraken or OKX, you’re still required to report. The government has tools to track blockchain activity, and banks now ask about crypto holdings during KYC updates.

What about losses? You can’t claim them to reduce your tax bill, but you can carry them forward for up to eight years—just not against other income. That means if you lost $10,000 on AXT and made $3,000 on PIXEL, you still pay tax on the $3,000. The loss is saved, but useless for now. And if you mined crypto or earned interest on DeFi platforms like Kyo Finance, that’s treated as income at fair market value. No gray areas here.

Staying compliant doesn’t mean you need to be an accountant. But you do need records: dates, amounts, values in INR at time of trade, wallet addresses, and exchange statements. Use a simple spreadsheet or free crypto tax tools—just make sure they track Indian rules. Don’t wait until April to start. If you’ve traded in the last year, you already owe taxes. The question isn’t whether you should pay—it’s whether you want to risk being caught later.

Below, you’ll find real breakdowns of crypto projects, exchange risks, and airdrop traps—all with one thing in common: they all impact your tax liability. Whether you’re holding ULTI, trading MMF, or wondering if LARIX is even real, the tax rules don’t care. They only care about what you earned, when, and how much. This collection gives you the facts you need to stay safe, avoid fines, and understand what’s actually happening with your crypto in India.