India Crypto & Forex Tax 2026: 30% Flat Rate, 1% TDS and the New Income-tax Act

India taxes crypto as a Virtual Digital Asset (VDA) at a flat 30% plus 4% cess, an effective 31.2%. No losses can be offset and only the cost of acquisition is deductible, while listed stocks enjoy 12.5% long-term capital gains with a INR 125,000 exemption.

The 30% Flat Rate on Crypto (VDA)

Every sale or swap of a Virtual Digital Asset is taxed at a flat 30%, plus the 4% cess, for an effective rate of 31.2%.

• Flat 30% on crypto gains plus 4% cess = 31.2% effective.
• No deductions except the cost of acquisition.
• No loss offset — crypto losses cannot reduce any income or be carried forward.

1% TDS on Crypto Transfers (Section 194S)

Exchanges and buyers deduct 1% TDS on every crypto transfer under section 194S. The amount is credited against your final tax liability when you file.

Stocks: 12.5% LTCG and 20% STCG

Listed shares held for more than one year qualify for long-term capital gains at 12.5%, with the first INR 125,000 of annual gains exempt. Shares sold within one year are short-term gains taxed at 20%.

Forex, F&O and Business Income

Futures and options (F&O) profits are always business income, taxed at slab rates that reach 30% plus cess. Frequent forex trading is treated as business income as well.

What Changed in 2026

• The new Income-tax Act 2025 is in force from 1 April 2026.
• Crypto rates are unchanged: still 30% flat plus 4% cess and 1% TDS.
• File by 31 July 2026 on ITR-2 or ITR-3 for trading and business income.

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