As cryptocurrencies like Bitcoin, Ethereum, Solana, and meme tokens gain traction in India, so does the government’s focus on their regulation and taxation. With the introduction of Section 115BBH, TDS under Section 194S, and GST considerations, cryptocurrency taxation in India is no longer a grey area.
Crypto is treated as a virtual digital asset (VDA) in India—not as legal tender. As per Budget 2022 onwards, income from crypto is subject to flat taxation, and detailed tracking via TDS and reporting requirements has been introduced.
📌 If you buy, sell, trade, mine, or even receive crypto as a gift—you may be liable to pay tax.
💧Crypto Faucets
Crypto faucets reward users with small amounts of crypto for completing tasks (e.g., surveys, ads). These are considered “income from other sources” and are taxable at slab rates, unless later transferred or traded (then taxed under 115BBH).
Tax Implications for Crypto in India
🔸 1. Income Tax (Section 115BBH)
Introduced in FY 2022-23, this mandates:
Flat 30% tax on all gains from VDAs (virtual digital assets)
No deduction allowed (except cost of acquisition)
No set-off against any other income or crypto loss
🔸 2. TDS (Section 194S) From July 1, 2022:
1% TDS is deducted on every crypto transfer exceeding ₹10,000 (₹50,000 for specified persons like salaried employees)
Applies to both crypto-to-crypto and crypto-to-INR transactions
📌 TDS applies even if there is no profit.
🔸 3 GST on Crypto Transactions
While GST is not levied on buying/selling crypto for personal investment, the following are subject to GST:
Crypto exchange fees or commissions
Services like mining (if provided commercially)
NFT transactions (as goods or services)
Penalties for Non-Compliance Non-reporting or misreporting crypto income can lead to:
📄 Notices under Section 143(1)
📌 50% to 200% penalty under Section 270A
💸 Prosecution under Section 276C for willful evasion
How Are Crypto Gifts Taxed in India?
If you receive crypto as a gift, it is taxable as “Income from Other Sources” under Section 56(2) if:
Gift value > ₹50,000 in a year
Giver is not a relative
Crypto is not received on a marriage or inheritance
Gifts received from close family are exempt.
Deal with Crypto Losses in India?
❌ Losses from crypto cannot be set off against other income (salary, business, capital gains)
❌ Cannot be carried forward
✅ Can only be used to offset crypto gains in the same financial year
As cryptocurrencies like Bitcoin, Ethereum, Solana, and meme tokens gain traction in India, so does the government’s focus on their regulation and taxation. With the introduction of Section 115BBH, TDS under Section 194S, and GST considerations, cryptocurrency taxation in India is no longer a grey area.
Crypto is treated as a virtual digital asset (VDA) in India—not as legal tender. As per Budget 2022 onwards, income from crypto is subject to flat taxation, and detailed tracking via TDS and reporting requirements has been introduced.
📌 If you buy, sell, trade, mine, or even receive crypto as a gift—you may be liable to pay tax.
💧Crypto Faucets
Crypto faucets reward users with small amounts of crypto for completing tasks (e.g., surveys, ads). These are considered “income from other sources” and are taxable at slab rates, unless later transferred or traded (then taxed under 115BBH).
Tax Implications for Crypto in India
🔸 1. Income Tax (Section 115BBH)
Introduced in FY 2022-23, this mandates:
Flat 30% tax on all gains from VDAs (virtual digital assets)
No deduction allowed (except cost of acquisition)
No set-off against any other income or crypto loss
🔸 2. TDS (Section 194S)
From July 1, 2022:
1% TDS is deducted on every crypto transfer exceeding ₹10,000 (₹50,000 for specified persons like salaried employees)
Applies to both crypto-to-crypto and crypto-to-INR transactions
📌 TDS applies even if there is no profit.
🔸 3 GST on Crypto Transactions
While GST is not levied on buying/selling crypto for personal investment, the following are subject to GST:
Crypto exchange fees or commissions
Services like mining (if provided commercially)
NFT transactions (as goods or services)
Penalties for Non-Compliance
Non-reporting or misreporting crypto income can lead to:
📄 Notices under Section 143(1)
📌 50% to 200% penalty under Section 270A
💸 Prosecution under Section 276C for willful evasion
How Are Crypto Gifts Taxed in India?
If you receive crypto as a gift, it is taxable as “Income from Other Sources” under Section 56(2) if:
Gift value > ₹50,000 in a year
Giver is not a relative
Crypto is not received on a marriage or inheritance
Gifts received from close family are exempt.
Deal with Crypto Losses in India?
❌ Losses from crypto cannot be set off against other income (salary, business, capital gains)
❌ Cannot be carried forward
✅ Can only be used to offset crypto gains in the same financial year