Home › Learn › Schedule VDA and Your Paper Trail (India)
Schedule VDA and Your Paper Trail
Where do I report crypto profits in my Indian income tax return?
Crypto gains go into Schedule VDA, a section of your income tax return: ITR-2 if trading isn't your business, ITR-3 if it is. That income is taxed at a flat 30% plus 4% cess, an effective 31.2%, as of August 2026.
Module 1 · Chapter 8 of 10 · ~5 min read · Tax and law facts as of August 2026
- 30%flat VDA tax
- 31.2%with cess
- 1%TDS on sale
- ₹50,000TDS & gift limit
You already know when 1% TDS is cut. Now turn those entries into an actual filing.
Which form your gains go into
Every crypto sale or swap gets reported in Schedule VDA. VDA means Virtual Digital Asset, the tax department's term for crypto.
Schedule VDA is not a standalone form. It sits inside your regular income tax return, the ITR.
File ITR-2 if crypto has no business income. File ITR-3 if trading crypto is effectively your business, as of August 2026.
Filling a Schedule VDA row
Each row needs two dates: when you acquired the coin, and when you sold it. It also needs your cost, what you received, the income, and the head of income: capital gains or business.
Take the chapter 5 example: cost ₹50,000, consideration ₹80,000. Income for that row is ₹30,000.
File one row per trade. Ten trades a year means ten rows, each with its own numbers.
Rows never net against each other. A loss row is entered as nil income.
The 30% rate and claiming back your TDS
VDA income is taxed flat at 30% under Section 115BBH, regardless of your slab. Add 4% cess for an effective 31.2%, plus surcharge on high incomes.
Only your cost of acquisition is deductible. Fees, brokerage and subscriptions are not, as of August 2026.
The rate is the same at ₹3 lakh or ₹30 lakh a year.
Many trades already had 1% TDS cut under Section 194S. The threshold is ₹50,000 a year for most individual traders, ₹10,000 for everyone else.
From 1 April 2026, the same rule moves to Section 393(1) of the Income-tax Act, 2025, still at 1%.
That TDS is not lost. It shows as a credit in Form 26AS and the Annual Information Statement, the AIS.
Claim the credit at filing time, so you are not taxed twice.
| Item | Where to check it |
|---|---|
| 1% TDS already deducted | Form 26AS and AIS, on the tax portal |
| Final tax at 30% plus 4% cess | Calculated on Schedule VDA income |
| Amount you actually pay | Tax owed minus the TDS credit |
What counts as a taxable event
Selling crypto for rupees is taxable. So is swapping one coin for another, say BTC for ETH, which counts as selling the first coin.
Paying a shopkeeper in crypto counts too: you are giving up the asset for value.
Gifts follow a different rule. Crypto from a non-relative is taxable once such gifts cross ₹50,000 in a year.
The whole amount is then taxed at your slab rate under Section 56(2)(x), not the flat 30%.
Gifts from close relatives, on marriage, or by inheritance are exempt at any value.
Moving coins between wallets you own is not a transfer, so no tax is due. Keep proof both addresses belong to you.
Simply holding, with no sale or swap, creates nothing to report.
The discipline behind a credible track record is the same discipline behind a credible filing. Both rest on dates that match your account statements.
Your paper trail from day one
Save four things from your very first trade. Your exchange's trade report, a downloadable CSV, gives dates and prices for every row.
Your bank statement shows the rupees moving, matching the exchange report. Save your TDS records against the matching entries in Form 26AS.
Keep a list of your own wallet addresses across exchanges and wallets. That list proves a wallet move was not a taxable transfer.
Key takeaways
- Crypto gains go into Schedule VDA, inside ITR-2 (no business income) or ITR-3 (trading as a business). Each row needs both dates, cost, consideration, the income and the head of income.
- That income is taxed at a flat 30% plus 4% cess, or 31.2%. Only your cost of acquisition is deductible, as of August 2026.
- Losses cannot be set off against anything, not even a gain on another coin. Section 115BBH also blocks carrying those losses forward to next year.
- Your 1% TDS credit is claimed against the entries in Form 26AS and the AIS, so you are not taxed twice.
- Gifts from a non-relative are taxable at slab rates past ₹50,000 in a year. Gifts from close relatives, marriage or inheritance are exempt; moving coins between your own wallets isn't a transfer either.
- Save from day one: the exchange trade report, bank statement, TDS records and your own wallet addresses. The AIS already shows your exchange data to the department, so a mismatch is what triggers a notice.
See Drishti Pro's live signals All lessons
Educational & illustrative only — not investment advice. Drishti Pro publishes AI-generated trade ideas and their public track record for information. Crypto is volatile and you can lose money. Nothing here is a recommendation to buy or sell any asset. Do your own research.