How to Pay Crypto Tax in India? Filing Methods & Important Details
Cryptocurrency investments in India have grown significantly, and so have the tax implications. If you invest in crypto, it’s crucial to understand how to pay crypto tax in India under the latest regulations from Budget 2025.
This guide breaks down crypto tax rates, TDS, reporting requirements, and payment methods in simple terms, ensuring you stay compliant while optimizing your tax strategy.
Crypto Tax in India: Understanding the Basics
Before you learn how to pay crypto tax in India, it’s important to understand the tax rules introduced in 2022 and updated in Budget 2025:
- 30% Tax on Crypto Gains: Any profit from selling or trading crypto is subject to a flat 30% tax, without deductions except for the purchase cost.
- 1% TDS on Transactions: Every crypto transaction above ₹50,000 (or ₹10,000 for certain taxpayers) is subject to 1% Tax Deducted at Source (TDS).
- No Set-Off or Carry Forward of Losses: Crypto losses cannot be adjusted against other gains.
- Gifting Crypto: Gifts exceeding ₹50,000 (from non-relatives) are taxed as income from other sources.
Understanding these basics will help you navigate the tax process efficiently.
How to Calculate Crypto Tax in India
To accurately pay crypto tax in India, you need to calculate your tax liability based on your transactions. Here’s how:
- Determine Your Profits:
- Subtract the purchase price from the selling price.
- Example: If you bought 1 Bitcoin at ₹20,00,000 and sold it at ₹30,00,000, your taxable gain is ₹10,00,000.
- Apply the 30% Tax Rate:
- ₹10,00,000 (profit) × 30% tax = ₹3,00,000 tax liability.
- Consider the 1% TDS Deduction:
- If you sell crypto worth ₹5,00,000, the exchange deducts ₹5,000 as TDS (1%).
- You can claim this TDS while filing ITR.
To simplify this, use the Mudrex Crypto Tax Calculator to estimate your tax liability instantly.
How to Pay Crypto Tax in India: Step-by-Step Guide
Once you’ve calculated your crypto tax, follow these steps to pay it correctly:
Step 1: Determine Your Taxable Income
Add up all your crypto gains, staking rewards, airdrops, and gifts.
Step 2: File Your Income Tax Return (ITR)
Crypto earnings must be reported under Income from Other Sources in ITR-2 or ITR-3.
Step 3: Pay Advance Tax (If Required)
If your tax liability exceeds ₹10,000 in a year, you must pay advance tax in four installments:
- 15% by June 15
- 45% by September 15
- 75% by December 15
- 100% by March 15
Step 4: Pay Tax Online via the Income Tax Portal
Follow these steps to pay your crypto tax:
- Visit the Income Tax e-Filing Portal.
- Log in using your PAN and password.
- Navigate to e-Pay Tax > New Payment.
- Select Advance Tax/Self-Assessment Tax.
- Enter the amount and choose Challan 280 for payment.
- Complete the transaction via net banking, UPI, or debit card.
Step 5: Submit TDS Claims While Filing ITR
Since 1% TDS is already deducted on crypto transactions, you can claim it as tax credit while filing your ITR.
Step 6: Keep Records for Compliance
Maintain records of:
- Purchase and sale invoices
- Crypto exchange transaction history
- TDS deductions and tax payments
Crypto Tax Exemptions and Deductions in Budget 2025
While no deductions are allowed on crypto gains, Budget 2025 has introduced some exemptions and relief measures:
- Crypto Donations & Charitable Giving
- Donations to registered charities may be eligible for tax deductions under Section 80G.
- Gifts from Relatives
- Crypto received as a gift from parents, siblings, or spouse is tax-free.
- Loss Adjustments for Certain Crypto Transactions
- Some DeFi losses (like impermanent loss in liquidity pools) might be eligible for limited tax adjustments.
Penalties for Not Paying Crypto Tax
Failing to pay crypto tax in India can lead to severe penalties:
| Offense | Penalty |
| Not reporting crypto income | Up to 70% of tax due |
| Non-payment of TDS | Interest @ 1.5% per month |
| Deliberate tax evasion | Up to 7 years of imprisonment |
Conclusion
Paying crypto tax in India is now a legal requirement, and non-compliance can lead to hefty penalties. By calculating your tax correctly, paying in advance, and filing ITR properly, you can stay tax-compliant and secure your crypto investments.
To make crypto investing and tax filing easier, download the Mudrex App today. Also, join the Mudrex Telegram Community for expert tax guidance, trade signals, and exclusive discussions.
FAQs
1. How do I report crypto gains while filing taxes?
Crypto gains must be reported under Income from Other Sources in ITR-2 or ITR-3. The total tax liability is calculated at a flat 30% rate, with 1% TDS credited.
2. Is crypto staking taxable in India?
Yes, staking rewards are taxed as Income from Other Sources at your slab rate. If later sold, they are subject to 30% capital gains tax.
3. Can I adjust crypto losses against other income?
No, crypto losses cannot be offset against other income or carried forward to future years.
4. How to avoid the 30% crypto tax legally?
- Receive crypto gifts from relatives (tax-free).
- Donate crypto to registered charities (tax deduction may apply).
- Use long-term investment strategies instead of frequent trading.
5. How do I claim the 1% TDS deducted on crypto transactions?
The deducted TDS is visible in Form 26AS on the Income Tax Portal. You can claim it while filing ITR as a tax credit.
Krishnan is a Bangalore-based crypto writer dedicated to simplifying complex crypto concepts. He covers blockchain, DeFi, and NFTs, with a focus on real-world asset tokenization and digital trust. Previously he has written on Real Estate related assets for NoBroker. Krishnan holds a B.Tech degree from the College of Engineering Trivandrum.
