Question 1

What is the tax rate on virtual digital asset gains in Tax Year 2026-27?

Accepted Answer

Section 194 of the Income-tax Act, 2025 generally taxes specified virtual-digital-asset transfer income at 30%, before applicable surcharge and 4% cess. The statutory computation allows only the permitted acquisition cost and has special loss restrictions.

Question 2

Can crypto trading losses be set off against other crypto profits or salary income?

Accepted Answer

No. Section 194 does not permit a loss from one VDA transfer to be set off against income from another VDA transfer or another source, and such loss cannot be carried forward.

Question 3

How does TDS apply to virtual digital asset transfers?

Accepted Answer

The current non-salary TDS provisions in Section 393 retain a 1% VDA-payment rule with category-specific annual thresholds. Responsibility can differ for exchange, broker, buyer and in-kind consideration, so use the official current instructions for the transaction route.

Question 4

Are expenses like gas fees or trading exchange commissions deductible from crypto tax?

Accepted Answer

No deduction is generally allowed under Section 194 other than the permitted cost of acquisition when computing VDA transfer income.

Question 5

How are crypto gifts or airdrops taxed under Indian tax laws?

Accepted Answer

Receipt of a VDA without or for inadequate consideration can be taxable under the current gifts/other-sources provisions, subject to the aggregate threshold and relationship or occasion exceptions. A later transfer is then tested separately under Section 194; determine acquisition cost from the applicable rule.

Crypto Tax Calculator (Section 194 VDA Tax)

Single Crypto / VDA Transfer

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