Cryptocurrency Tax India: What You Must Know About Reporting, Rules, and Penalties

When you buy, sell, or trade cryptocurrency, digital assets like Bitcoin or Ethereum that are treated as property for tax purposes. Also known as crypto assets, they're not money in the eyes of Indian law — they're capital assets. That means every time you sell Bitcoin for rupees, trade ETH for SOL, or even use crypto to buy goods, you trigger a taxable event. The Income Tax Department of India, the government body that enforces tax laws and collects revenue clarified in 2022 that all crypto gains — whether short-term or long-term — must be reported. There’s no gray area anymore. If you made a profit, you owe tax.

India doesn’t have a separate crypto tax law, but the rules are clear: crypto income, any profit from selling or exchanging digital assets is taxed as capital gains. Short-term gains (held less than 3 years) are added to your total income and taxed at your slab rate — up to 30%. Long-term gains (held 3+ years) get taxed at 20% with indexation. And don’t forget the 1% TDS on every crypto trade since July 2022. That’s deducted by exchanges like Unocoin, one of India’s oldest and most regulated crypto platforms before you even see your cash. It’s not optional. It’s automatic. Even if you use P2P apps or foreign exchanges, the law still applies. The government tracks transactions through bank statements and exchange reports. Missing a report isn’t just a mistake — it’s a legal risk.

What about losses? You can offset crypto losses against crypto gains, but not against other income like salary or rent. And if you mined crypto or earned it as airdrops, that’s treated as income at fair market value on the day you received it. Staking rewards? Taxable too. The rules are strict, but they’re also practical. You don’t need to be an accountant to follow them — just keep records of every trade, date, amount, and rupee value. Tools like CoinTracker or Koinly help, but even a simple Excel sheet works if you’re consistent. The real question isn’t whether you need to pay — it’s whether you want to risk a notice from the tax department. With the RBI crypto tax, the regulatory framework guiding how banks and financial institutions interact with crypto still evolving, compliance is your safest move. Below, you’ll find real cases, exchange reviews, and regulatory updates that show exactly how Indian crypto users are handling taxes in 2025 — from beginners on Unocoin to traders using offshore platforms. No fluff. Just what you need to stay legal and avoid surprises.