Crypto Tax in India: File Before Jan 31

Crypto investors in India must take the upcoming January 31 deadline. The government monitors each and every transaction that deals with cryptocurrencies closely, and tax norms for virtual digital assets have been made strict. If you gain profit from crypto, you need to report such profit and also pay 30% tax for profit and 1% TDS on all sell transactions. The focus of tax departments in crypto regulations is on a strong paper, which is keeping a check on data from crypto exchanges. So filing the taxes on time helps you to stay safe from penalties and notifications. Filing early allows you time to suggest possible errors and prevents last-minute confusion.

You have to file taxes even if you deal on foreign exchanges or go for peer-to-peer transfers. Every investor has to report the crypto income in the ITR form duly. The government expects complete transparency from crypto traders. So the best advice is simple: calculate your gains, file your ITR before January 31st, and be by the books.

Key Sections and Content

• Introduction: Hooks on the Jan 31 deadline, 30% tax + 1% TDS, and government tracking (e.g., via exchanges’ FIU reports).
• What is Crypto Tax?: Defines VDAs; 30% on profits (no STLT distinction), 1% TDS (advance, even on losses), 18% GST on exchange fees; deductions limited to cost basis only.
• Why Jan 31 Matters: Late filing = ₹5,000 penalty + interest; advance tax is mandatory if >₹10,000 liability.
• How to File: 3 steps—calculate gains (FIFO method), use ITR-2 for capital gains, and pay advance tax.
• Crypto Tax Table: Basic slabs showing crypto added to income.
• Example Calculation: BTC buy ₹3L, sell ₹5L → ₹2L profit → ₹60K tax (30%) – ₹5K TDS = ₹55K net.
• Common Mistakes: 5 pitfalls (e.g., ignoring TDS, no records, assuming foreign exchanges are safe).
• Tools for Filing: Recommends Koinly for data import/reports.
• Final Advice: File early, keep proofs, and stay transparent.
• FAQs (5 Qs): Covers start date (Apr 1, 2022), deadline, rates, GST, and the “70% tax” myth (it’s a penalty).

What is Crypto Tax in India?

Crypto tax is the tax that you pay on the profit made on trading or investing in cryptocurrency. The government considers crypto to be a virtual digital asset (VDA). So when you sell crypto at a higher price than what you bought, you make a capital gain. The government taxes this gain at 30%, regardless of the length of your holding of the asset. It does not matter whether the profit is short-term or long-term. The tax rate stays 30%.

Apart from this, every time you sell crypto, the exchange will charge you 1% TDS. TDS stands for tax deducted at source. It acts like advance tax. You can change this amount at a later stage during the filing of your ITR. Even if you make a loss, TDS still applies to the amount of the sale.

You cannot include expenses such as internet fees, transfer fees, or other expenses in your crypto gains. The government only allows the purchase costs of the asset to be deducted.

Why January 31 Deadline Matters

The January 31 deadline is very important to every crypto investor. If you miss this date, the tax department charges penalties and interest. You must be ahead of the deadline so that you do not receive a late fee. If you file late, then you can pay up to ₹5,000 as a penalty. You also have to pay additional interest for the unpaid tax.

When you file on time, you save yourself from the attraction of tax and detailed scrutiny. The tax department issues their notices when they see discrepancies in transaction and reporting. Filing early allows more time to rectify mistakes and finish the verification.

You must also not forget to pay advance tax in case your total tax liability is in excess of ₹10,000. If you ignore advance tax, then you have to pay interest on the unpaid amount. Timely filing of ITR ensures peace of mind and a smooth process with no stress.

Important Dates and Rules (Extracted)

• Filing Deadline: January 31, 2026 (for FY 2025-26).
• Tax Year: April 1, 2025–March 31, 2026 (assessment year 2026-27).
• Advance Tax: Due if liability > ₹10,000 (quarterly: Jun 15, Sep 15, Dec 15, Mar 15).
• Tax Rates:

Income Slab	Base Tax Rate	Crypto-Specific (Profits)	TDS on Sales
<₹2.5L	0%	30% flat	1%
₹2.5L–₹5L	5%	30% + cess/surcharge	1%
₹5L–₹10L	20%	30% + cess/surcharge	1%
>₹10L	30%	30% + cess/surcharge	1%

(GST: 18% on fees; no loss offsets/carry-forward.)

Crypto Tax India 2025-26: Complete Filing Checklist

(Tick these before January 31, 2026 to avoid penalties)

Step	Action Item	Done?	Notes / Links
1	Download Form 26AS & AIS from TRACES portal	☐	Check TDS already deducted by exchanges
2	Collect all transaction reports (CSV) from Indian exchanges (WazirX, CoinDCX, ZebPay, CoinSwitch, etc.)	☐	Most provide “Tax Report” button
3	Export wallet history (MetaMask, Trust Wallet, Ledger, Binance global, KuCoin, etc.)	☐	Use free tools below if manual
4	Import everything into a tax tool (Koinly, ClearTax Crypto, CoinTracker, KoinX)	☐	Recommended: Koinly India – auto FIFO
5	Verify cost basis method = FIFO (mandatory in India)	☐	No LIFO/HIFO allowed
6	Calculate total VDA profit/loss for FY 2025-26	☐	30% flat tax only on profit
7	Check 1% TDS already paid (credited in Form 26AS)	☐	Deduct this from final tax
8	Pay advance tax if liability > ₹10,000 (last instalment Dec 15, 2025 already due)	☐	Pay here
9	Fill Schedule VDA in ITR-2 or ITR-3	☐	Download latest ITR utility from incometax.gov.in
10	Report airdrops, staking rewards, mining income as “Income from Other Sources” (not VDA)	☐	Taxed at your slab rate
11	Keep proofs for 7 years (invoices, bank statements, screenshots)	☐	In case of IT notice
12	File ITR before January 31, 2026	☐	Belated filing allowed till Dec 31, 2026 with ₹5,000 penalty

Bonus Tools (Free/Paid)

Tool	Free Tier?	India-Specific	Link
Koinly	Yes (up to 100 txns)	Yes	koinly.io/in
ClearTax Crypto	Yes (basic)	Yes	cleartax.in/crypto
KoinX	Yes	Yes	koinx.com
CoinTracker	Yes (limited)	Partial	cointracker.io

How to File Crypto Tax in India

You can follow three simple steps to file your crypto tax for you:

1. Calculate Gains

Track your trades from all the different exchanges. Calculate the total profit of the financial year. Use tools such as Koinly to create tax reports seamlessly. Koinly imports the data from the exchanges automatically and calculates gains, losses, and TDS details accurately. It saves time and eliminates mistakes.

2. Fill ITR-2

Use ITR-2 if you have crypto transactions. This form applies to investors who receive income from capital gains. Report your total crypto profit from this capital gains section and include supporting reports. Make sure that you enter your buying and selling details correctly.

3. Pay Advance Tax

You have to pay advance tax if the amount of your tax exceeds ₹10,000. It helps in avoiding interest charges, as per the Income Tax Act. Paying on time keeps your ITR clean.

Crypto Tax Table Explained

Income	Tax
Less than ₹2.5 lakh	0%
₹10 lakh	₹1.12 lakh + 30% on crypto profit

If your total income is less than ₹2.5 lakh, then you do not pay income tax. But crypto tax rules are no different. Crypto profit gets added to total income and gets taxed at 30%.

An example of this is a person earning a salary amount of ₹10 lakh coming under a tax slab. The income tax on ₹10 lakh is ₹1.12 lakh. If the person is also earning ₹2 lakh profit on crypto, then the 30% tax on crypto equals ₹60,000. So the total tax becomes ₹1.72 lakh. On top of that, 1% TDS is already in force while selling crypto. That process of adjusting the TDS amount gets adjusted later on while filing ITR.

This system can help the government monitor crypto transactions and prevent tax evasion.

Example Calculation

Let us look at a real scenario. Suppose an investor purchased Bitcoin for ₹3 lakh and later sold it for ₹5 lakh. The profit is ₹2 lakh.

Crypto Tax

• Capital Gain: ₹2,00,000
• 30% Tax: ₹60,000

TDS

• 1% TDS on ₹5 Lakh value of the sale.
• TDS = ₹5,000

So the final tax that you pay at filing time would be ₹60,000 less ₹5,000 TDS, which is already deducted from it. You pay ₹55,000.

If you file by January 31, you avoid penalties or interest. If you file after the deadline, then you are charged extra.

Common Mistakes People Make

Many people commit errors while filing crypto tax. Notices and penalties result from such errors. Learn these common issues and get away from them.

Ignoring TDS

Traders forget to check the history of TDS. Their opinion is that the TDS is not important. But the comparison of TDS affects the final paying of tax. Keep records.

Mixing spot trading and futures

The mechanism of spot and futures is different. Future profits are taxed under business income if traded frequently. Mixing them makes wrong tax reports.

Not keeping trade records

Exchanges do not save history forever. Download trade files on a regular basis.

Believing foreign exchanges are not tracked

Foreign exchange accounts also get reported. The government monitors these transactions as well.

Thinking losses reduce tax

Crypto losses can’t adjust crypto gains from another coin. You can’t carry losses forward either.

Tools That Help with Filing

You can use simple tools that will help you easily manage crypto tax reports. Tools such as Koinly help to track profits, losses, and also TDS. Koinly reads information on inputs from exchanges, wallets, and trading apps. It produces a complete tax account, which is ready to file. You save time and avoid confusion. These tools assist the beginners and advanced traders equally.

You can also keep all the invoices and withdrawal proofs in folders or spreadsheets. This is a helpful situation for you when you have questions coming from the tax department. Keeping everything tracked is the key to keeping it a simple filing.

Final Advice

Always file the crypto tax before January 31. Stay compliant and avoid unnecessary penalties. Calculate your gains correctly. Pay TDS and advance tax on time. Use tools that make it easy to report. Stay transparent and honest. Filing early provides peace of mind. You manage your investments confidently if you have rules that you follow carefully.

More successful trading of crypto takes place when you plan for your tax accordingly. A smart trader is always compliant and informed. Use the rules to your advantage, and avoid waiting for the last moment.

FAQs

When did crypto start getting taxed in India?

Crypto taxation started on 1st April, 2022, when the government introduced Section 115BBH in the Union Budget for 2022. Since then, any profits made by trading in cryptocurrencies are taxed at 30%, plus 4% cess and surcharge as applicable.

When do you need to file crypto tax in India?

Investors are required to file their crypto tax returns before January 31 every year as a part of the income tax filing process. The government wants all crypto transactions to be reported in the ITR-2 form.

What is the current tax rate on crypto in India?

India charges 30% tax on crypto profits and 1% TDS deduction on each trade. Investors must also pay advance tax if they anticipate major gains during the year.

Do I need to pay GST on crypto transactions?

Yes. The GST Council clarified that crypto exchange service fees such as trade fees, withdrawal fees, deposit fees, and other fees on the trading platform shall attract 18% GST. This is applicable for spot trading, margin trading, derivatives, staking & other crypto services.

Is there a 70% tax on crypto profits in India?

The 70% figure is related to penalties, not standard tax rates. If someone hides crypto income or does not report profits, heavy penalties by the tax department are possible and may be 70% plus of the undisclosed income, plus interest and possibly prosecution.

Official Government Links (Must Bookmark)

• Download Form 26AS / AIS → incometax.gov.in
• Pay Advance Tax / Self-Assessment Tax → NSDL Portal
• Latest ITR Forms & Utilities → Download Section

Also read: How to Avoid Crypto Scams in 2026