If you bought, sold, swapped or even received crypto in the last year, the tax department already knows. Exchanges deduct a 1% TDS on your trades and report them straight to the portal — so this isn't a return you can quietly skip. The good news: reporting it is mechanical once you know the steps. The bad news: there are three traps that quietly inflate your bill or trigger a notice. Here's both.
The rule, in one line
Every crypto gain is taxed at a flat 30%under Section 115BBH, plus 4% cess. You can deduct only what you paid for the coin — not exchange fees, not gas, not internet. There's no basic exemption and the 87A rebate doesn't apply, so even a tiny gain is taxed at 30%. And a 1% TDS (Section 194S) is skimmed off your sales as an advance.
30%
Flat tax on every crypto gain under Section 115BBH — same whether you held a day or five years, with no exemption and no rebate.
How to fill Schedule VDA, step by step
Filing crypto comes down to five moves on the Income Tax e-Filing portal:
- Pull your reports. Export full transaction history from every exchange and wallet (CoinDCX, WazirX, Binance, MetaMask…), including P2P trades and swaps. A crypto tax calculator can consolidate these into one ITR-ready file.
- Reconcile your TDS. Open View Form 26AS / AIS and check the 1% TDS deducted under Section 194S. Your declared sale value should be at least the consideration the portal already shows — mismatches invite notices.
- Pick the form and open Schedule VDA.Use ITR-2 if you're an investor, ITR-3 if you trade as a business. Open Schedule VDA and add one row per transfer.
- Enter each transaction. For every sale or swap, fill the fields below. The portal auto-computes the taxable income.
- Claim TDS and file. Move to the TDS/Taxes-Paid schedule, claim credit for your 194S TDS, review the 30% computation, then validate and e-verify with Aadhaar OTP.
| Schedule VDA field | What to enter |
|---|---|
| Date of acquisition | The date you bought (or received) the coin. |
| Date of transfer | The date you sold, swapped or spent it. |
| Head of income | Capital Gains (most investors) or Business/Other Sources (active traders). |
| Cost of acquisition | What you paid in ₹ — the only thing you can deduct. |
| Sale consideration | The total ₹ you received on selling or swapping. |
| Income from transfer | Auto-computed = sale consideration − cost of acquisition. |
The three traps that cost people money
1. Losses are wasted.A loss on one coin can't offset a gain on another, can't reduce other income, and can't be carried forward. Gain ₹1 lakh on Bitcoin and lose ₹60,000 on Ethereum in the same year, and you still pay 30% on the full ₹1 lakh. You can owe tax in a year you lost money overall.
2. Swaps are sales.Trading one crypto for another — even a stablecoin — is a taxable transfer under Section 115BBH. You don't have to cash out to rupees to trigger tax; every swap is a sale at market value.
3. Foreign wallets need Schedule FA. If you hold crypto on a foreign exchange or self-custody wallet, you must also disclose it in Schedule FA (Foreign Assets) — separate from Schedule VDA. This one is serious: non-disclosure falls under the Black Money Act, with penalties up to ₹10 lakh per asset and possible prosecution.
Worked example: a losing year that still owes tax
Arjun bought Bitcoin for ₹2,00,000 and sold for ₹3,50,000 — a ₹1,50,000 gain. He also bought Ethereum for ₹1,50,000 and sold for ₹90,000 — a ₹60,000 loss. His real profit for the year is ₹90,000. But the ₹60,000 loss is ignored, so he pays 30% on the full ₹1,50,000 = ₹45,000, plus 4% cess = ₹46,800. On his actual ₹90,000 profit, that's an effective rate above 50%. The 1% TDS already deducted on his sales is credited against this when he files.
With crypto, you're not taxed on what you made — you're taxed on every coin that gained, even if your portfolio lost money.
What it means for you
Honest take: the filing itself is mechanical — pull your statements, fill Schedule VDA row by row, claim your TDS. Where people lose money is the math they don't see coming: wasted losses, taxable swaps, and the foreign-wallet disclosure that carries the heaviest penalty of all. Don't eyeball the 30% across a year of trades.
Add your trades to the crypto tax calculator to see your exact 30% tax, the 1% TDS you've already paid, and whether you owe a balance or are due a refund — then carry those numbers straight into Schedule VDA. And if you also sold shares or property, here's how capital gains work in ITR 2026.
Rules are for FY 2025-26 (AY 2026-27) under Section 115BBH and 194S, unchanged by Budget 2026, before surcharge. Schedule FA / Black Money Act consequences apply to foreign-held assets. Confirm your case on incometaxindia.gov.in or with a CA. General information, not tax advice.