VDA tax in India: the whole rule, and what it costs
Four rules decide almost every rupee of it. Three of them are unusual enough that people get the number badly wrong the first time.
A virtual digital asset — crypto, tokens, NFTs — is taxed under its own regime in India, not as an ordinary capital asset. The regime is short, and almost all of it reduces to four rules.
| Rule | Effect |
|---|---|
| 30% flat | On the gain from every profitable disposal, whatever your income slab. |
| Plus 4% cess | Health and education cess, charged on the tax. Effective 31.2%. |
| Cost only | Nothing is deductible except what you paid for the asset. |
| No set-off | Losses reduce nothing. Not other crypto gains, not other income, not next year. |
Separately, 1% TDS is withheld on sale value once your transactions for the year pass a threshold. That is a credit against what you owe, not an extra tax.
The section numbers changed in 2026
The Income-tax Act, 2025 replaced the 1961 Act with effect from 1 April 2026. VDA taxation carried over unchanged in substance and renumbered in form:
| Rule | Transfers up to 31 Mar 2026 | Transfers from 1 Apr 2026 |
|---|---|---|
| 30% flat tax | s.115BBH, ITA 1961 | s.194, Table Sl. No. 4, ITA 2025 |
| 1% TDS | s.194S, ITA 1961 | s.393(1), Table Sl. No. 8(vi), ITA 2025 |
The date that governs is the date of the transfer, not the date you file. A sale on 15 March 2026 is a s.115BBH transfer reported in a return filed months later; a sale on 15 April 2026 is a s.194 transfer. The arithmetic is identical either way — this is a labelling question, but a wrong citation in a filing is worth avoiding.
What "no set-off" costs, concretely
Three trades in one year
| Trade | Result | Taxed on |
|---|---|---|
| BTC | +₹2,00,000 | ₹2,00,000 |
| ETH | −₹1,50,000 | ₹0 |
| SOL | +₹50,000 | ₹50,000 |
| Net result in your pocket | +₹1,00,000 | — |
| Taxable | — | ₹2,50,000 |
| Tax + cess at 31.2% | — | ₹78,000 |
You made ₹1,00,000 and owe ₹78,000. An effective rate of 78% on what you actually earned — and in a worse year, a tax bill on a losing portfolio is entirely possible.
This is not an interpretation. The return's own form encodes it: Schedule VDA's total is defined by the Income Tax Department's validation rules as the sum of all positive incomes in the income column. Loss rows are entered, then excluded. See what goes in each Schedule VDA column.
What counts as a disposal
- Selling for rupees — obviously.
- Trading one coin for another — buying ETH with USDT disposes of the USDT. Each asset is its own asset, so each exchange is a transfer. A year of swapping with no rupee withdrawal can still produce a large bill.
- Spending crypto on goods or services.
What is not a disposal: moving your own coins between your own exchanges and wallets. That is where most wrong numbers come from — many tools lose the purchase price across a transfer and then tax the entire sale value. Worked example of that failure.
What is not deductible
"Cost of acquisition" means what you paid for the asset. Not your exchange's trading fees on the way out, not platform charges, not interest, not the cost of your hardware or your electricity. The conservative reading — and the one worth assuming until a professional tells you otherwise for your facts — is that a ₹1,00,000 sale with a ₹1,000 fee is ₹1,00,000 of consideration.
What this page does not cover
- Surcharge. It depends on your total income across every head, and on your regime. The 31.2% above is base tax plus cess, before surcharge. For higher incomes the real figure is higher.
- Gifts, airdrops, mining and staking receipts. These raise questions about which head the income falls under, separate from the disposal rules above.
- Futures, perpetuals and options. Whether a cash-settled derivative is a "transfer of a virtual digital asset" at all is genuinely unsettled. Anyone telling you confidently either way is overstating what is known.
Working out your own number
The calculator on this site takes your exchange exports and produces the figure with every step shown — which lots were consumed, what each cost, where the TDS threshold was crossed, and the same rows in Schedule VDA's own columns. It refuses rather than guesses when your files are missing something, and it runs entirely in your browser: no account, and nothing uploaded.
Rates, thresholds and section numbering above are maintained in this project's tax rule register, with the source and the effective date for each. This is a calculation and reconciliation tool, not tax advice, and it has not been reviewed by a Chartered Accountant — check anything you intend to file with a qualified professional.
Work out your own position
Drop your exchange exports into the calculator and open up every number it produces. It runs entirely in your browser — no account, no upload, and your files never leave your device.