The tax rules for Virtual Digital Assets (VDAs)—which include cryptocurrencies like Bitcoin, Ethereum, and Non-Fungible Tokens (NFTs)—remain among the most stringent in the world. As you prepare your tax return for AY 2026-27, it is critical to understand the special schedules and flat rates that apply to crypto income.

The Flat 30% Crypto Tax Rate

Any income derived from the transfer of Virtual Digital Assets is taxed at a flat rate of 30% (plus applicable surcharge and cess). No basic exemption limit or tax slabs apply to this income. Even if your total annual income is below the basic tax threshold, any crypto gain will be taxed at 30%.

No Offset of Crypto Losses

One of the harshest realities of crypto taxation in India is the absolute restriction on setting off losses:

• No Inter-Asset Offset: If you make a ₹40,000 profit on Bitcoin but incur a ₹30,000 loss on Ethereum, you cannot offset the loss. You must pay 30% tax on the full ₹40,000 profit. The ₹30,000 loss becomes entirely dead and offers no tax benefit.
• No Carry Forward: Crypto losses cannot be carried forward to subsequent financial years to offset future gains.

The 1% TDS Mechanism

A 1% Tax Deducted at Source (TDS) is deducted on all crypto sales transactions exceeding ₹10,000 (or ₹50,000 in specific cases) within a financial year. This TDS is deposited with the government and is reflected in your Form 26AS/AIS. You can claim this TDS against your final tax liability or claim a full refund if your net tax liability is zero.