Athira Sethu
Kochi, 18 July 2026
If you have received income via cryptocurrencies such as Bitcoin, Ethereum, or Non-Fungible Tokens in the FY 2025-26, then it becomes essential for you to report these transactions in your Income Tax Return (ITR). The Income Tax Department has made it compulsory for you to make disclosures about these cryptocurrency transactions in order to save yourself from being noticed and fined.
According to the Indian tax laws, Virtual Digital Assets include cryptocurrencies, Non-Fungible Tokens, and some others. Income arising from the transfer of such assets is subjected to taxation.
What ITR form should you use?
Based on how your crypto income is classified, the following ITR form is applicable for Assessment Year 2026–27.
- ITR-2 if your crypto income is taxed as capital gains.
- ITR-3 if your crypto transactions are classified as business income.
All your taxable crypto transactions should be reported in Schedule VDA of the ITR form. It includes transactions like selling, exchanging, or transferring of cryptocurrencies like Bitcoin, Ethereum, and many other virtual digital assets.
Important considerations while filing your ITR
Some important considerations by tax experts that should not be ignored while reporting crypto income are as follows:
- If TDS of 1% is deducted in your crypto transactions under Section 194S, then ensure that you have claimed the TDS credit in your ITR.
- Keep relevant documentation like exchange statements, wallet history, purchase documents, sale documents, and TDS certificate.
What is the taxation on crypto in India?
Taxation on crypto differs from other forms of investments in India. They include:
- Profit gained on disposal of cryptocurrencies and other VDAs will attract tax at a rate of 30% plus applicable surcharge and health and education cess.
- During calculation of profit, there is a provision to deduct only the cost of acquisition of the crypto asset.
- There is no provision to allow deduction of expenses like transaction charge, brokerage and commission.
- When you make a loss on crypto transactions, you cannot claim deductions against the loss or offset it with any other source of income. Such loss cannot be carried forward.
- ITR submission deadline
The deadline for ITR-1 and ITR-2 submissions for AY 2026–27 is July 31, 2026. For taxpayers with non-audit business income, including those filing ITR-3, the deadline is August 31, 2026.
Reporting of every taxable transaction of crypto and filing of ITRs within the deadline will ensure compliance with the tax laws.
