How Is Crypto Taxed Under Section 115BBH?
Income from transfer of Virtual Digital Assets (VDAs), including qualifying crypto assets, is subject to a special tax regime. The current ITR forms provide a separate Schedule VDA for transaction-wise disclosure.
Quick Answer
For AY 2026-27, the Income Tax Department states that income from transfer of Virtual Digital Assets is taxable at 30% under section 115BBH, along with applicable surcharge and cess. ITR-2 and ITR-3 contain a separate Schedule VDA for transaction-wise reporting.
What Is the Tax Rate on VDA Income?
The Income Tax Department states that gains from Virtual Digital Assets are subject to a 30% tax under section 115BBH, along with applicable surcharge and 4% cess. The notified AY 2026-27 ITR material separately identifies VDA income taxable at 30%.
How Is Crypto Reported in the ITR?
Schedule VDA is provided in ITR-2 and ITR-3. The Income Tax Department describes it as a transaction-wise schedule, with details required for every transfer.
Is VDA Income Reported Like Ordinary Share Gains?
No. VDA income is subject to its own special-rate provision. It should therefore not simply be combined with ordinary equity-share capital gains when preparing the return.
What Records Should Crypto Traders Keep?
Keep exchange statements, transaction ledgers, wallet records where relevant, acquisition details, transfer consideration and evidence supporting each transaction. Multiple exchanges should be reconciled before preparing Schedule VDA.
Practical Checklist
- Export complete transaction histories from each exchange.
- Reconcile deposits, withdrawals, transfers and trades before calculating taxable transfers.
- Keep INR valuation support for transactions where required.
- Report each transfer in the applicable Schedule VDA.
Related Capital Gains Questions
- What Is Capital Gain in Income Tax?
- What Is Short-Term and Long-Term Capital Gain?
- How to Calculate Capital Gain From Shares?
- What Is Cost of Acquisition for Capital Gains?
