India Crypto Tax: What You Need to Know About Rules, Penalties, and Compliance

When you buy, sell, or trade crypto in India, a country that has moved from banning crypto to taxing it heavily. Also known as the Indian crypto regulatory framework, it now treats digital assets as taxable property, not currency. Since 2022, the government has imposed a flat 30% tax on all crypto gains—no deductions, no offsets, no exceptions. Even if you lose money on one coin and make money on another, you still pay 30% on your profits. That’s not how stocks work. That’s not how gold works. But it’s how crypto works in India.

Then there’s the 1% TDS, a tax deducted at source on every crypto transaction over ₹10,000. Also known as Tax Deducted at Source, this rule hits every trade, swap, or transfer on Indian exchanges. If you buy ₹50,000 worth of Bitcoin, ₹500 is taken off the top before it even hits your wallet. No warning. No choice. It’s automatic. And if you use a foreign exchange? The rule still applies if you’re an Indian resident. The government tracks this through bank statements, KYC data, and exchange reports. Ignorance isn’t an excuse. This isn’t just about income tax. It’s about control. India wants to know who owns what, when they bought it, and how much they made. That’s why crypto reporting, the process of declaring all crypto activity to the Income Tax Department. Also known as crypto disclosure, it’s now mandatory for anyone filing an ITR in India. You must report every wallet address you’ve used, every exchange you’ve traded on, and every transaction date. Miss one, and you risk penalties, interest, or even a notice from the tax department.

And the penalties? They’re not small. If you don’t file, you could face a fine of up to ₹10 lakh. If you lie or hide transactions, you could be charged with tax evasion—punishable by jail time. The IT department has tools to cross-check your bank flows with exchange data. If you deposited ₹20 lakh into an exchange and withdrew ₹25 lakh with no income declared? They’ll find you. And they will ask for proof.

What’s in this collection? Real, no-fluff breakdowns of how crypto tax works in India—what you owe, what you can’t avoid, and how to stay legal without overpaying. You’ll find posts on exchange compliance, how TDS affects your trades, what happens if you use Binance or Kraken from India, and why claiming losses doesn’t help you here. There’s no guesswork. Just facts. Just rules. Just what you need to know before you trade, sell, or stake your next coin.