India’s Crypto Tax Deadline is Tomorrow—Last 24 Hours Could Save You Lakhs

March 31 marks the end of Financial Year 2025-26. Every crypto trade, every swap, every airdrop that hit a wallet between April 1, 2025 and tomorrow is now part of the taxable record. There is no way to undo any of it. The only question left is whether it gets reported correctly — or becomes a problem later.

And there is a second reason this particular date matters more than previous years. Starting April 1, 2026, the government has introduced a penalty framework through the Finance Bill, 2026 aimed at tightening crypto compliance. Exchanges that fail to report transaction data will be fined ₹200 per day. Incorrect filings that go uncorrected attract a flat ₹50,000 penalty. 

The Income Tax (IT) Department last year sent 44,000 notices to individuals who hadn’t filed crypto transactions in their FY25 returns, so the surveillance infrastructure is clearly in place and actively being used.

This article covers everything: how crypto tax actually works in India, what can realistically be done in the next 24 hours, what kicks in from April 1, and what to keep in mind for the new financial year.

What can realistically be done in the next 24 hours

The financial year closes tomorrow. There isn’t time to restructure a portfolio or consult a CA about a complex DeFi position. But a few things are genuinely worth doing today, because they make the filing process dramatically easier when July comes around.

Download every transaction report. Log into every exchange — CoinDCX, WazirX, CoinSwitch, Binance, whatever was used — and export the full transaction history for April 1, 2025, to March 31, 2026, as CSV files. Some platforms auto-archive old data after a financial year ends, making it a painful support-ticket exercise to retrieve later. Do it while the data is fresh and accessible.

Check the Annual Information Statement (AIS). This is available on the Income Tax e-filing portal. The AIS already reflects high-value crypto transactions that exchanges have reported against a PAN. If transactions are showing up that were forgotten about, it’s better to know now than to discover them during a mismatch notice in September.

Look at Form 26AS. This shows all TDS deducted against a PAN, also available on the IT portal. The 1% TDS entries from Indian exchanges should be visible here. Cross-check these against each exchange’s own records. Discrepancies happen — wrong PAN linkage, missed deductions — and they’re much easier to sort out now.

Make a rough estimate of the tax liability. Even a ballpark number helps. Add up all profitable trades (remember, each crypto is treated independently — losses in one cannot reduce gains in another). Apply 31.2% to the total. Compare against the TDS already paid. The difference is what’s owed. If the number is significant, setting aside that amount in a separate account today avoids the scramble later. Tools like KoinX and Koinly offer free calculators that can do this quickly.

Note down all airdrops, staking rewards, and mining income received during the year. These are taxable on receipt at the slab rate, not at 30%. Many investors forget about small staking payouts that accumulated over months. A quick scan of wallet histories today saves a lot of reconstruction work later.

How crypto tax actually works in India

The entire framework rests on two pieces of legislation introduced in the Finance Act 2022. Section 2(47A) of the Income Tax Act defines Virtual Digital Assets (VDAs) — a broad category that covers all cryptocurrencies, NFTs, tokens, stablecoins, and essentially anything generated through cryptographic means. Section 115BBH then imposes a flat 30% tax on any income arising from the transfer of these VDAs.

A “transfer” includes selling crypto for rupees, swapping one crypto for another, spending crypto on goods or services, or gifting it to someone. It does not include moving crypto between wallets owned by the same person, or simply holding an asset without transacting.

The rate is 31.2%, not 30%

Everyone quotes 30%, but the actual minimum effective rate is higher. A 4% Health and Education Cess gets added on top of the tax amount, pushing the floor to 31.2%. For individuals with a total annual income above ₹50 lakh, surcharges apply on top of that, and the effective rate can climb as high as 42.74% at the top bracket.

Only the purchase price can be deducted

This is intentionally restrictive. The only amount that can be subtracted from the sale price to calculate the taxable gain is the original cost of acquisition. Exchange commissions, gas fees, network charges, transaction fees — none of these are deductible. 

Section 80C, 80D, and other standard deductions cannot be claimed against crypto income either. And it doesn’t matter whether an investor files under the Old Tax Regime or the New Tax Regime — the 30% flat rate under Section 115BBH applies identically under both.

Holding period makes no difference

Unlike equities, where long-term capital gains attract a lower tax rate, crypto has no such benefit. Whether an asset was held for one day or five years, the 30% flat rate applies. This is one of the starkest differences between how India treats crypto versus how it treats traditional investments.

The loss rules — This is where most people get caught off guard

The loss treatment under Indian crypto tax law is unusually harsh, and it’s the single biggest source of confusion among investors. A detailed analysis by KoinX based on data from nearly 7 lakh users found that the consequences are significant:

Losses in one crypto cannot offset gains in another. Each Virtual Digital Asset is treated as a completely independent unit. A ₹3 lakh profit on Bitcoin and a ₹2 lakh loss on an altcoin results in ₹3 lakh being taxed — not the net ₹1 lakh. The ₹2 lakh loss is effectively discarded.

Crypto losses cannot offset any other income. Not salary, not rental income, not stock market gains. Nothing.

Losses cannot be carried forward. A net loss in FY 2025-26 cannot be used to reduce tax in FY 2026-27. Once the financial year closes, the loss is gone permanently.

To put this in perspective: the KoinX Crypto Tax Report for FY 2024-25 found that 49.09% of Indian crypto investors ended the year in net losses, but those investors still paid tax on ₹180 crore of isolated gains because cross-asset netting is not allowed. The total taxable capital gains reported were ₹3,722 crore, significantly higher than the actual net gains of ₹2,861 crore, purely because of this restriction.

The 1% TDS 

Section 194S requires a 1% Tax Deducted at Source on every crypto transfer above the applicable threshold. The threshold is ₹50,000 per financial year for individuals and HUFs with business turnover below ₹1 crore, and ₹10,000 for everyone else. The CoinDCX crypto tax guide has a useful breakdown of how this plays out for different investor categories.

On Indian exchanges like CoinDCX, WazirX, and CoinSwitch, TDS happens automatically. The exchange deducts 1% from the transaction amount and deposits it with the government against the seller’s PAN. On foreign exchanges like Binance, MEXC, or KuCoin, nothing is deducted. The legal responsibility falls entirely on the Indian investor, and most people trading on foreign platforms have never done this.

The critical thing to understand is that TDS is not an extra tax. It’s an advance payment that gets credited to the PAN. When the ITR is filed, the TDS already paid is set off against the final tax liability. If TDS paid exceeds the actual tax owed, the difference comes back as a refund. But the refund only happens if the ITR is filed. This is actually the strongest argument for filing a return even in a loss year — the only way to get back the TDS that exchanges already deducted is to file.

A number worth knowing: In FY 2024-25, total TDS collected across India’s crypto ecosystem was ₹511.83 crore. Of that, over 30% of users had TDS deductions that exceeded their actual tax payable, leaving an estimated ₹38.52 crore in excess TDS waiting to be refunded through ITR filing. Less than 5% of traders accounted for 87% of total TDS collections.

Airdrops, Staking Rewards, and Mining — Taxed Even Without Selling

One of the most commonly overlooked aspects of Indian crypto taxation is that receiving certain types of crypto income triggers a tax obligation at the point of receipt — regardless of whether the tokens are ever sold. 

Airdrops

Receiving tokens through an airdrop is treated similarly to receiving a gift. If the total value of all gifts and airdrops received in the financial year stays below ₹50,000, there’s no tax. Once it crosses ₹50,000, the entire amount becomes taxable at the individual’s income tax slab rate. Later, if those tokens are sold at a profit, the gain (sale price minus fair market value on the date of receipt) is taxed at 30%.

So the same tokens get taxed twice: once when they arrive, and once when they’re sold. The cost basis for calculating the gain on sale is the FMV at the time of receipt.

Staking rewards

Staking rewards are treated as income the moment they land in a wallet. The fair market value in INR on the date of receipt is taxable at the individual slab rate. Any subsequent gain when those rewards are eventually sold is taxed at 30%. ClearTax’s crypto guide walks through worked examples of how this double taxation plays out on staking income.

Mining

Mining income follows a similar pattern. The FMV of mined tokens on receipt is taxable as business income or income from other sources, depending on the scale of operations. Gains on eventual sale are taxed at 30%.

The unresolved question: What happens when staking rewards are locked or vesting? Tokens might technically be received but cannot be transferred, sold, or used until a vesting period ends. The Income Tax Department has not issued any guidance on whether such tokens are taxable on the date of receipt or only when they become liquid. Most chartered accountants err on the side of caution and recommend treating them as taxable on receipt, but this is interpretation, not law.

Crypto gifts — From relatives, weddings, and everyone else

Crypto gifts from relatives as defined under Section 56 of the Income Tax Act — spouse, parents, siblings, lineal ascendants and descendants — are completely tax-free on receipt, with no upper limit. Gifts received on the occasion of marriage or through inheritance are also fully exempt. Koinly’s India guide has a detailed breakdown of which relationships qualify and which don’t.

Gifts from non-relatives exceeding ₹50,000 in total value during the financial year are taxable at the recipient’s slab rate.

The part that catches people: when gifted crypto is eventually sold, the cost basis used to calculate the gain is the original giver’s purchase price — not the value on the date the gift was received. If a parent bought Bitcoin at ₹1 lakh, gifted it when it was worth ₹10 lakh, and the recipient sells at ₹12 lakh, the taxable gain is ₹11 lakh, not ₹2 lakh. 

The Crypto Times covered a related scenario recently where even using crypto to buy a streaming subscription creates a taxable transfer under Section 115BBH.

DeFi, Yield Farming, and Liquidity Pools — The Law Hasn’t Caught Up

India’s crypto tax framework was designed around straightforward buy-and-sell transactions. As CAClubIndia’s analysis of the Budget 2026 amendments explains, the reporting framework targets exchanges and intermediaries — but DeFi protocols have no intermediary, leaving a regulatory blind spot.

• Adding liquidity to a protocol (like Uniswap or Aave) involves swapping tokens for LP tokens. Whether this constitutes a taxable “transfer” is unclear.
• Yield farming returns — earned as interest, fee shares, or governance tokens — don’t fit neatly into any existing income category.
• Impermanent loss, a well-known risk for liquidity providers, has no tax treatment whatsoever. There is no mechanism to recognise or deduct it.
• Wrapping tokens (ETH to WETH) technically looks like a crypto-to-crypto swap, which should be taxable, but the economic position doesn’t change.
• Cross-chain bridge transactions occupy a grey zone between wallet transfers (not taxable) and swaps (taxable).

Until the government issues formal guidance, the conservative approach is to treat every token swap as a taxable event. The IT Department flagged concerns about offshore exchanges, private wallets, and decentralised platforms in a recent presentation to the Parliamentary Standing Committee on Finance, noting that the anonymous nature of DeFi makes detection of taxable income “very difficult.” This suggests more regulation, not less, is coming.

What a ₹10 lakh profit actually looks like after everything

Here’s the full breakdown of a straightforward buy-and-sell trade, including exchange fees, GST on those fees (18% since July 2025), TDS, and the actual tax:

On a ₹10 lakh gross profit, the actual take-home is about ₹6.72 lakh after tax, TDS, exchange fees, and GST. And the exchange fees and GST are not even deductible — they simply reduce the net amount received without reducing the taxable gain.

What changes from April 1, 2026

The tax rates themselves haven’t changed. The 30% flat tax, 1% TDS, loss rules, and deduction restrictions all carry forward into FY 2026-27. But several operational changes take effect:

New penalty framework for reporting entities. Crypto exchanges and entities covered under Section 509 of the Income Tax Act are now required to submit detailed transaction statements to the IT Department. Failure to submit attracts a penalty of ₹200 per day for as long as the default continues. Filing incorrect information that isn’t corrected attracts a flat ₹50,000 penalty. 

Digital records are now fair game during investigations. From April 1, 2026, income tax authorities are explicitly empowered to inspect digital records including app logs and crypto wallet data during raids. This formalises something that was happening informally and gives it a clear legal basis.

AI-driven monitoring is scaling up. The IT Department is using platforms like Project Insight and the Non-Filer Monitoring System (NMS) to automatically match TDS filed by exchanges against what investors report in their ITR. If there’s a mismatch, the system generates a “nudge” notification. The government collected ₹269 crore in crypto taxes in FY 2022-23 and ₹437 crore in FY 2023-24 — the system is clearly working and expanding.

CARF adoption by April 2027. India is planning to adopt the OECD Crypto-Asset Reporting Framework by April 2027. This will enable automatic global data sharing on offshore wallets and exchange trades, meaning overseas holdings will no longer remain invisible to Indian tax authorities.

FIU classification of exchanges as PMLA reporting entities. India’s Financial Intelligence Unit moved in January 2026 to classify crypto exchanges as reporting entities under the Prevention of Money Laundering Act. This means mandatory live detection through selfies and geo-tracking during onboarding, along with enhanced KYC requirements.

What to keep in mind for FY 2026-27

With the new financial year starting tomorrow, here is what every crypto investor in India should be thinking about going forward:

Track everything from day one. Maintain a running record of every transaction — date, type (buy/sell/swap/airdrop/staking), quantity, INR value, exchange or wallet used, and any fees paid. Doing this throughout the year is infinitely easier than trying to reconstruct 12 months of history in July. CoinDCX’s guide recommends downloading reports monthly rather than waiting for year-end.

Pay advance tax quarterly if liability will exceed ₹10,000. The due dates are June 15, September 15, December 15, and March 15. If crypto profits are expected to result in more than ₹10,000 in tax for the year, advance tax must be paid in installments. Missing these attracts interest under Sections 234B and 234C.

Foreign exchange users must self-deposit TDS. Binance, KuCoin, MEXC, and decentralised exchanges do not deduct TDS for Indian users. The investor is legally required to calculate and deposit 1% TDS via challan. The government has explicitly flagged foreign exchange usage as a compliance gap.

Expect tighter surveillance. With exchanges now mandated to report under both the IT Act and PMLA, and AI systems actively matching filings, the room for under-reporting has narrowed significantly. Nearly 72.7% of India’s crypto trading volume has reportedly migrated to offshore platforms, and the government is clearly aware of this trend.

Consider using crypto tax software. Tools like KoinX, Koinly, ClearTax, and CoinTracker integrate with Indian exchanges and can auto-calculate gains using FIFO, generate Schedule VDA reports, and reconcile TDS. For anyone with more than a handful of trades, doing this manually is genuinely painful.

No reforms are expected soon. The Ministry of Finance has clarified that no changes to the existing crypto tax framework are anticipated in the near future. Bitcoin ETFs are also not being considered for India. The industry’s requests — lower TDS, loss offsetting, tiered rates — have been consistently declined since 2022.

Filing Crypto Taxes — The Practical Steps

ITR form selection

ITR-2 is used when an individual has capital gains from crypto alongside salary or other income but no business income. ITR-3 is for individuals who treat crypto trading as a business activity. Schedule VDA, a dedicated section within these forms, is where every crypto transaction gets reported line by line.

What goes into Schedule VDA

• Type of VDA (Bitcoin, Ethereum, NFT, token name, etc.)
• Date of acquisition and date of transfer or sale
• Cost of acquisition in INR
• Sale consideration in INR
• Resulting gain or loss on each individual transaction

Deadlines for Assessment Year 2026-27

Common mistakes that lead to notices

• Not filing an ITR in a loss year. The AIS already shows the transactions. Silence looks like concealment.
• Treating only INR cashouts as taxable. Every crypto-to-crypto swap triggers a separate taxable event.
• Mentally netting gains and losses across different coins. The law doesn’t allow it, and filing this way invites scrutiny.
• Forgetting about airdrops and staking rewards that accumulated in small amounts over the year.
• Not depositing TDS when trading on foreign exchanges. The responsibility is entirfely on the investor.
• Deducting exchange fees, gas fees, or transaction costs from the taxable gain. Only the acquisition cost is deductible.
• Mismatch between AIS/26AS data and the ITR filing. Always reconcile before submitting.

Quick reference

In closing

India’s crypto tax regime is among the strictest in the world, and the 2026-27 Budget made it clear that relief isn’t coming anytime soon. The industry will continue to push for loss offsetting, lower TDS, and rational rate structures — but until those changes happen, the framework is what it is.

The cost of non-compliance, though, is worse than the tax itself. Penalties for under-reporting can go up to 200% of the unpaid tax. The IT Department has the data, the AI tools, and the mandate to enforce. Forty-four thousand nudge notices in one year is not a bluff.

The financial year closes tomorrow. Download the data, check the AIS, know the number. The meter resets on April 1 and the new one comes with stricter rules.

Also Read: Pune: India’s Crypto Scam Capital? ₹20,000 Cr Lost and Still Counting