Crypto Tax India: What You Need to Know About Reporting Crypto in 2025

When you buy, sell, or trade crypto tax India, the legal requirement to report cryptocurrency gains and losses to India’s Income Tax Department. Also known as cryptocurrency taxation in India, it applies to every transaction—whether you swapped Bitcoin for Ethereum, sold Solana for rupees, or earned tokens from airdrops. The rules aren’t optional. The government tracks everything through exchange data, wallet analytics, and bank transfers. If you made even ₹10,000 in profit last year, you’re required to file it.

India treats crypto like property, not currency. That means every trade triggers a taxable event. Sell Bitcoin for USDT? Taxable. Use ETH to buy an NFT? Taxable. Get 500 DYP tokens in an airdrop? Taxable too—even if you didn’t sell them yet. The value is locked in at the time you receive it. You don’t need to cash out to owe tax. This is different from most countries. And unlike stocks, there’s no tax-free threshold for crypto gains in India. The Indian crypto regulations, the legal framework enforced by the Income Tax Department and Financial Intelligence Unit to monitor digital asset flows are clear: 30% tax on all gains, plus a 1% TDS on every trade over ₹10,000. No deductions. No offsets. No losses carried forward. Even if you lost money on 10 trades but made ₹50,000 on one, you pay 30% on that single profit.

The crypto income tax, the specific tax liability incurred by Indian residents on cryptocurrency transactions, calculated based on acquisition and disposal values doesn’t care if you used Binance, CoinSwitch, or a peer-to-peer app. The tax department gets data from all major exchanges operating in India. If you used a foreign exchange like Kraken or Bybit, they’re still required to report your activity if you’re an Indian resident. Many people think using a non-KYC platform keeps them hidden. It doesn’t. Bank deposits above ₹10 lakh get flagged. If your wallet sends rupees to your bank account after a crypto sale, that’s a paper trail.

And yes—airdrops count. The DYP airdrop, the CrossWallet CWT drop, even the fake CoPuppy scam tokens—all are taxable when you receive them. The value is based on the market price at the moment they hit your wallet. If you later sell them for a profit, you pay 30% again. There’s no exemption for gifts, rewards, or free tokens. The same goes for yield farming. Earned 2% APY on Curve Finance? That’s income. Staked tokens earned rewards? Taxable. Even if you didn’t touch them, the moment they’re credited, they’re income.

What about losses? You can’t use them to reduce your tax bill. If you bought Ethereum for ₹2 lakh and sold it for ₹80,000, you lost ₹1.2 lakh. That loss doesn’t lower your tax on your Bitcoin profit. You just lost money and still owe tax on everything else. This is unique to India. In the U.S., you can offset losses. In India? You’re stuck paying on gains, no matter how many losses you have.

The crypto reporting India, the mandatory process of disclosing cryptocurrency transactions and gains to Indian tax authorities through ITR forms and audit requirements system is getting smarter. The government now cross-checks your ITR with exchange data, bank statements, and even blockchain explorers. If you didn’t report a $5,000 trade from last year and the IRS flagged it, you’ll get a notice. Penalties start at 100% of the tax due. In some cases, they go higher. And yes, they can freeze your bank accounts.

What’s in the posts below? Real examples of how people got caught, what they owed, and how to fix mistakes. You’ll find breakdowns of airdrops that triggered taxes, exchange shutdowns that left people scrambling, and how to track every transaction without spreadsheets. No fluff. No theory. Just what you need to file correctly—and avoid a notice from the taxman.