How to File ITR for Crypto Income in India (2025): Complete Guide for Taxpayers
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Cryptocurrencies like Bitcoin, Ethereum, and Solana have seen massive adoption in India. But with growing usage comes greater scrutiny — and yes, taxes. In 2025, filing your Income Tax Return (ITR) with crypto income is not only mandatory but also strictly monitored by the Indian government.
If you are confused about how to declare your crypto trades, earnings, or holdings in your ITR, you’re not alone. This blog breaks down the process in simple terms — covering rules, forms, tax rates, and steps to file your return for FY 2024–25 (AY 2025–26).
📌 Why Is Crypto Taxed in India?
Since April 1, 2022, the Indian government began taxing Virtual Digital Assets (VDAs) under Section 115BBH of the Income Tax Act.
This includes:
- Cryptocurrencies (e.g., Bitcoin, Ethereum)
- NFTs (Non-fungible tokens)
- Tokens from DeFi, GameFi, and Metaverse platforms
Under this rule:
- A flat 30% tax is charged on income from the transfer of crypto assets.
- No deductions or exemptions are allowed except for the cost of acquisition.
- A 1% TDS (Tax Deducted at Source) is applicable on all crypto transfers above ₹50,000 (or ₹10,000 in some cases) under Section 194S.
How to File ITR for Crypto Income in India (2025): Complete Guide for Taxpayers
💰 What Is Considered Crypto Income?
Here’s what counts as crypto income:
1. Trading Gains
- Selling Bitcoin/Ethereum at a profit
- Converting one crypto to another (e.g., ETH to SOL)
2. Staking or Mining Rewards
- Income earned from staking ETH or other tokens
- Rewards from mining blocks
3. Airdrops and Free Tokens
- Any new tokens received via promotions or forks
4. Payments Received in Crypto
- Freelancers accepting payments in USDT, BTC, etc.
5. NFT Sales
- Selling NFTs on OpenSea, Magic Eden, etc.
All of these must be declared while filing ITR, even if you did not convert crypto to INR.
🧾 ITR Filing Forms for Crypto Income (AY 2025–26)
You must choose the correct Income Tax Return form depending on your source of income:
| ITR Form | Suitable For |
|---|---|
| ITR-1 (Sahaj) | Not applicable (crypto income not allowed) |
| ITR-2 | Salaried individuals with capital gains from crypto |
| ITR-3 | Income from business/profession + crypto |
| ITR-4 (Sugam) | Not applicable if crypto involved |
Most crypto investors/traders will use ITR-2 or ITR-3, depending on whether their trading activity is occasional (investment) or frequent (business).
🔢 Crypto Tax Calculation in India (2025)
Here’s how to calculate tax on crypto assets:
➤ For Investors (Capital Gain Treatment)
- Sale Price – Cost of Purchase = Profit
- Flat 30% tax on total profit
- No indexation or deductions allowed
➤ For Traders (Business Income Treatment)
- If trading frequently (daily/weekly), the income may be taxed as business income
- Still taxed at 30% under Section 115BBH
- No set-offs allowed for losses from other heads
➤ TDS (1%)
- Exchanges like WazirX, CoinDCX, and Binance deduct 1% TDS before you receive funds
- You must reconcile these TDS credits with Form 26AS during filing
📝 Step-by-Step Guide: How to File ITR for Crypto Income (2025)
Here’s a beginner-friendly guide for filing your ITR:
✅ Step 1: Collect Crypto Transaction Details
Prepare a complete record of:
- Buy and sell transactions
- Dates, amounts, and tokens involved
- INR value at the time of transaction
- TDS deducted (from exchanges or counterparties)
Use tools like:
- CoinTracker, KoinX, Zerion, or WazirX Tax Reports to export CSV data.
✅ Step 2: Categorize the Crypto Activity
Decide whether your crypto income is:
- Capital Gains → If you’re an occasional investor
- Business Income → If you trade frequently or full-time
✅ Step 3: Calculate Your Taxable Income
Example:
You bought ETH for ₹1,00,000 and sold it for ₹1,80,000 in January 2025.
Profit = ₹80,000
Tax = 30% of ₹80,000 = ₹24,000
Cess (4%) = ₹960
Total Tax Payable = ₹24,960
✅ Step 4: Choose and Fill the Right ITR Form
- Log in to the Income Tax Portal
- Navigate to “e-File → Income Tax Return”
- Select AY 2025–26 and choose ITR-2 or ITR-3
- Under “Schedule VDA” or “Schedule Capital Gains”, report:
- Name of asset (e.g., BTC, ETH)
- Date of purchase and sale
- Cost of acquisition
- Sale consideration
- Profit and applicable tax
✅ Step 5: Claim TDS Credits (Form 26AS)
Check Form 26AS for:
- TDS deducted on crypto transactions (usually by the exchange)
- Match it with your own records
- Credit this amount while calculating final tax due
✅ Step 6: Pay Remaining Tax & Submit Return
- Use Challan 280 to pay any balance tax
- Submit and e-verify using Aadhaar OTP, net banking, or EVC
Done! You’ve successfully filed your ITR for crypto income.
📌 Important Notes for 2025
- Even if you hold crypto without selling, no tax applies yet — but you may still have to declare the value in Schedule FA (if held in foreign wallets/exchanges).
- Losses from crypto cannot be carried forward or set off against other income.
- Crypto gifts (above ₹50,000) are taxable in the hands of the receiver.
- TDS applies even for peer-to-peer (P2P) trades, not just through exchanges.
🛑 What Not to Do While Filing ITR for Crypto
- ❌ Don’t skip reporting P2P or decentralized (DEX) trades
- ❌ Don’t assume losses are deductible — they aren’t
- ❌ Don’t delay till the last date (likely September 15, 2025)
- ❌ Don’t forget to check Form 26AS for crypto TDS
How to File ITR for Crypto Income in India (2025): Complete Guide for Taxpayers
💬 FAQs on Filing Crypto ITR in India (2025)
❓ Is holding crypto taxable in India?
No. Just holding crypto isn’t taxable. Tax arises only when you sell or transfer it.
❓ Can I show crypto under “Other Income”?
No. As per law, crypto must be filed under Section 115BBH — either as capital gains or business income, not “Other Income.”
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