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Section 115BBH · AY 2026-27

Crypto is taxed on its own terms

Not at your slab rate. Not after your costs. And a losing year does not soften a winning one. Section 115BBH is the shortest schedule in the Act and the least forgiving, which is why a return that treats crypto like any other capital asset comes out wrong.

The four rules that make it different

A flat 30%

Every rupee of income from transferring a virtual digital asset is charged at 30%, with surcharge and cess on top. Holding period does not matter — there is no long-term rate and no indexation. Nor does your own slab: a taxpayer whose other income is nil still pays 30% on the gain.

Surcharge on this income is charged at the full applicable rate. The 15% cap that protects certain capital gains does not extend to it.

Cost of acquisition, and nothing else

The only amount you may deduct from the consideration is what you paid for the asset. Exchange commission, gas fees, transfer charges, platform subscriptions and interest on borrowings are all outside the section.

This is the rule that most often makes a filer’s own spreadsheet disagree with the return: the spreadsheet nets off the fees because that is what a trader means by profit, and the return cannot.

No set-off — not even against other crypto

Section 115BBH(2) bars set-off of a virtual digital asset loss against any income, including a gain on a different virtual digital asset. A year with ₹5,00,000 of gains and ₹4,00,000 of losses is taxed on ₹5,00,000.

No carry-forward

And the loss does not wait for a better year either. It cannot be carried forward. BharatTax reports the disallowed amount on the set-off screen rather than dropping it silently, because a filer who cannot see the loss assumes it went somewhere.

Where the numbers come from

A year of exchange activity does not arrive as one figure, and the two statements the department holds rarely agree with the one your exchange gives you.

AIS

Carries the reported transfers and the tax deducted u/s 194S. BharatTax imports it, including the encrypted download, and de-duplicates before it reconciles.

26AS

The tax credit statement. Where 26AS and AIS disagree on TDS, the return follows 26AS — that is the credit the department will actually allow.

Your own records

Acquisition cost per transfer is the one figure neither statement holds. It comes from you, and it is the figure the 30% is charged net of.

Held on an exchange outside India?

Then there are two obligations, and only one of them depends on your having sold anything.

A resident and ordinarily resident taxpayer discloses foreign holdings in Schedule FA every year they are held, whether or not there was a transfer and whether or not there was income. Crypto on a foreign platform sits in the schedule’s table for other capital assets. Non-disclosure is dealt with under the Black Money Act, 2015, and separately from anything in the Income-tax Act — which is why it is worth getting right even in a year when nothing was sold.

The tax on a transfer, when there is one, is the same flat 30%. Foreign assets and the credit for foreign tax covers the disclosure side in full.

Questions

What rate is crypto taxed at in India?
Income from the transfer of a virtual digital asset is taxed at a flat 30% under Section 115BBH, plus surcharge and cess. The rate does not depend on how long you held the asset and it does not depend on your slab — a gain of ₹10,000 and a gain of ₹10,00,000 are both charged at 30%.
Can I deduct my trading costs, gas fees or interest?
No. Section 115BBH allows the cost of acquisition and nothing else. Exchange fees, gas fees, transfer charges, subscription costs and interest on money borrowed to buy are all disallowed. BharatTax takes an acquisition cost per transfer and does not offer a field for the rest, because there is nowhere in the return to put them.
Can I set a crypto loss off against a crypto gain?
No. Section 115BBH(2) bars set-off entirely — a loss on one virtual digital asset cannot be set against a gain on another, against any other head of income, or against anything at all. Nor can it be carried forward to a later year under 115BBH(2)(c). It is simply lost, and BharatTax shows the disallowed amount rather than quietly dropping it.
What about the TDS my exchange deducted?
Tax deducted u/s 194S appears in your 26AS and AIS against the capital gains head, and it is a credit against the 30% like any other TDS. BharatTax reads it out of the 26AS when you import it, so the credit is claimed against the right head rather than missed.
Which ITR form do I use for crypto?
ITR-2 if crypto is the only business-like activity you have, and ITR-3 if you also have business or professional income. ITR-1 and ITR-4 cannot carry a virtual digital asset schedule at all, so a filer with crypto is out of the simple forms whatever the amount.
Do I have to report crypto held on a foreign exchange?
If you are resident and ordinarily resident, a holding on an exchange outside India is a foreign asset, and Schedule FA requires it to be disclosed whether or not you sold anything during the year. Disclosure and taxation are separate obligations — the second only bites when you transfer, the first bites every year you hold.

Compute it on your own transfers

Import the AIS, add the acquisition cost per transfer, and see the 30% with the disallowed losses shown rather than hidden. Nothing is payable until you download the JSON to file with.

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