Gains on transfer of virtual digital assets, such as cryptocurrency and NFTs, are taxed at a flat 30% under Section 115BBH, plus surcharge and cess. No deduction is allowed except the cost of acquisition, and losses cannot be set off against other income or carried forward.
Under Section 194S, the buyer or exchange deducts 1% TDS on transfers. TDS applies above ₹50,000 in a year for specified persons, such as individuals and HUFs without business income above the audit limit, and above ₹10,000 for others.
Key points
- Flat 30% tax on gains, with no basic exemption benefit for these gains
- Only the cost of acquisition is deductible
- Losses on one asset cannot be set off against gains on another
- 1% TDS under Section 194S above the thresholds
- Report each transaction in the VDA schedule of the return
General information only, not professional advice. Section references are to the Income-tax Act, 1961; corresponding provisions of the Income-tax Act, 2025 apply from 1 April 2026. Thresholds and dates may change by notification.
CA Rahul Rajendra MohiteACA, M.Com · ICAI Membership No. 622387 · Founder, Rahul R. Mohite & Co., PuneFirm profile and key facts