Crypto Tax India: What You Owe, How to Report, and What Happens If You Don’t

When you trade, sell, or earn crypto tax India, the legal obligation to report cryptocurrency gains and income under Indian tax law. Also known as digital asset taxation, it applies to everyone who buys, sells, or mines Bitcoin, Ethereum, or any other token—even if you never cashed out. Since 2022, India treats crypto as a taxable asset, not currency. That means every trade, swap, or airdrop could trigger a tax bill.

There are two main types of taxes: crypto income tax, tax on earnings from staking, mining, or receiving crypto as payment, and crypto capital gains, tax on profit when you sell or exchange crypto for fiat or another token. The government doesn’t care if you used Binance, WazirX, or a peer-to-peer wallet—what matters is the gain. If you bought Bitcoin at ₹30 lakh and sold it at ₹45 lakh, you owe tax on ₹15 lakh profit. No exceptions. Even if you swapped ETH for SOL, that’s a taxable event. And yes, that includes NFTs. If you bought one and sold it later for more, it’s a capital gain.

Reporting is simple in theory: you track every transaction, calculate gains or losses, and file under capital gains or income in your ITR. But in practice, it’s messy. Most people don’t know how to track transactions across wallets, exchanges, or DeFi protocols. Tools like Koinly or CoinTracker help, but they’re not magic—you still need to input your data correctly. The government doesn’t have a crypto tracker, but they’re getting better at spotting patterns. Banks report large inflows. Exchanges like CoinDCX and ZebPay now share KYC data with tax authorities. If your bank account suddenly shows ₹20 lakh from an unknown source, expect questions.

Penalties aren’t warnings—they’re fines. If you don’t report, you could face a 100% penalty on the tax due, plus interest. In serious cases, the Income Tax Department can freeze your bank accounts or launch a full investigation. And it’s not just about big traders. Even if you earned ₹5,000 from an airdrop or tipped someone with Dogecoin, it’s taxable. You don’t need to be rich to get caught. You just need to have moved crypto.

What about mining? If you mine crypto in India, you owe income tax on the fair market value of the coins when they hit your wallet. Electricity costs don’t reduce your taxable amount. Airdrops? Taxable at the moment you receive them. Gifts? If you get crypto from someone else and later sell it, you owe tax on the gain from the gift’s value at receipt. There’s no gift tax exemption for crypto like there is for cash.

And yes, this applies even if you’re not a resident. If you’re an NRI and you sold crypto while living in India, or if you transferred crypto to an Indian wallet, you’re still on the hook. The law doesn’t care where you live—it cares where the transaction happened or where the asset is held.

Below, you’ll find real cases, broken-down examples, and guides on how to track your crypto activity without getting overwhelmed. Some posts show how people got caught. Others explain how to file correctly. No theory. No guesswork. Just what actually happens when crypto meets Indian tax law.