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The Flat 30% Tax
How much tax do I pay on crypto profit in India?
As of August 2026, India taxes crypto profit at a flat 30% under Section 115BBH, now Section 194 of the Income-tax Act, 2025, plus a 4% cess for an effective 31.2% for most people, whatever your income slab. The only deduction allowed is your purchase cost, so a ₹30,000 gain costs ₹9,360 in tax and leaves ₹20,640.
Module 1 · Chapter 5 of 10 · ~5 min read · Tax and law facts as of August 2026
The last chapter covered what's legal in crypto. This chapter covers the tax on your profit.
The flat 30% rule
Section 115BBH taxes profit from a virtual digital asset at a flat 30%. That term is the government's name for crypto.
A 4% health and education cess applies on top, an effective 31.2% for most people. It covers every token, Bitcoin and Ethereum included.
- 30%flat tax
- 4%cess on top
- 31.2%effective rate
The rule has applied since 1 April 2022, on an Indian exchange and a foreign one alike.
A new Income-tax Act then took effect on 1 April 2026. The same 30% now sits in its Section 194, as of August 2026.
No chartered accountant is needed: it's the same two steps every time, 30% of the gain then 4% of that tax.
Your income slab does not matter
Salary and business income are taxed by slab: higher earners pay more. Crypto skips that system, even if it's your only income all year.
A ₹3 lakh earner and a ₹40 lakh earner pay the same tax on this ₹30,000 gain. A share sale works differently, since equity brackets differ by income.
| Annual income | Tax on this ₹30,000 gain |
|---|---|
| ₹3,00,000 | ₹9,360 |
| ₹15,00,000 | ₹9,360 |
| ₹40,00,000 | ₹9,360 |
One exception sits at the top of the income range. Cross ₹50 lakh of total income and a surcharge lifts the bill above ₹9,360.
The 30% rate itself does not move, as of August 2026. Your crypto gain is taxed on its own, never mixed with your slab.
What you can subtract, and what you cannot
Only one deduction is allowed: the cost of acquisition, what you originally paid for the crypto.
In the ₹50,000-to-₹80,000 example, ₹50,000 is that cost. Split it into UPI payments of ₹15,000, ₹20,000, and ₹15,000: still ₹50,000.
Keep every purchase receipt and exchange statement safe. It's the only number you'll need to defend at tax time.
No discount for patience
Listed shares reward holding on for over a year. Long-term gains up to ₹1.25 lakh a year are exempt.
Above that, a 12.5% tax applies, as of August 2026. Crypto has no exemption threshold, so the first rupee of gain is taxed.
There is also no indexation, no adjustment for inflation. Holding five years gets no lower rate than holding five days.
Even short-term equity gains, taxed at 20% as of August 2026, allow brokerage as a deductible expense. Crypto allows none of that.
Every deal counts, even gifts
A taxable transfer happens more often than most people expect. Selling crypto for rupees is one obvious case.
Swapping Bitcoin for Ethereum is also a transfer, even without moving rupees. Paying for a phone or a service directly in crypto counts too.
Moving crypto between your own two wallets is not a transfer. Only a change of ownership triggers the tax.
Each event needs its own gain calculation, using market value at that moment. This holds whether or not the signal behind the trade was worth following.
Tax applies at the sale, not the advice. Gifts catch many people off guard.
Under Section 56(2)(x), crypto from a non-relative counts as income for the receiver, taxed at their slab rate.
The trigger is ₹50,000 of such gifts in one year, added up. Cross that line, and the whole value is taxed, not just the excess.
A gift from a specified relative, such as a parent, spouse, or sibling, is exempt on receipt.
The next chapter explains why losses cannot cancel gains.
Key takeaways
- Section 115BBH taxes gains on transfer of a virtual digital asset at a flat 30%, plus 4% health and education cess, an effective 31.2% for most people. The same rule sits in Section 194 of the Income-tax Act, 2025 from 1 April 2026, as of August 2026.
- Your income slab does not change the rate. A ₹3 lakh earner and a ₹40 lakh earner both pay ₹9,360 on a ₹30,000 gain. Above ₹50 lakh of total income, a surcharge is added on top.
- Only the cost of acquisition is deductible from your gain. Brokerage, exchange fees, your internet bill, a subscription, and an advisory fee are all excluded.
- There is no ₹1.25 lakh exemption like equity long-term gains, no indexation, and no lower rate for holding longer.
- Every disposal of crypto counts as a taxable transfer. Selling for rupees, swapping Bitcoin for Ethereum, and paying for something in crypto all count.
- Crypto gifted by a non-relative is taxed in the recipient's hands once the year's gifts cross ₹50,000. The 30% tax applies again on the gain when they sell.
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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.