India’s crypto-tax framework entered a new compliance phase in 2026 without reducing the tax burden on investors. The Income Tax Department has reiterated that income from Virtual Digital Asset transfers remains taxed at 30%, while qualifying transactions continue to attract 1% TDS. The major change is expanded transaction reporting under Section 285BAA.
Crypto Tax Rates Remain Unchanged
Under Section 115BBH, income from transferring VDAs is taxed at 30%, plus applicable surcharge and cess. Only the cost of acquisition can be deducted when calculating taxable income. Other expenses cannot be deducted, while VDA losses cannot be offset against other income or carried forward.
Section 194S continues to impose 1% TDS on payments to residents for VDA transfers. The annual threshold is Rs. 50,000 for specified individuals or HUFs and Rs. 10,000 for other payers.
Reporting Becomes the Bigger Change
Section 285BAA, introduced through the Finance Act, 2025, took effect on April 1, 2026. It requires prescribed reporting entities to submit information about crypto-asset transactions in the specified form, timeframe and manner.
The Finance Act also expanded Section 2(47A) to explicitly include crypto assets representing value through cryptographically secured distributed ledgers or similar technology.
According to the Income Tax Department, specified reporting entities must report transactions involving crypto assets covered by this expanded definition.
Enforcement Focus Intensifies
The framework increases the government’s visibility into crypto transactions while leaving investor taxation unchanged. The wider enforcement backdrop is significant. Minister of State for Finance Pankaj Chaudhary told the Lok Sabha in December 2025 that tax searches and surveys had detected Rs 888.82 crore in undisclosed VDA income.
Meanwhile, parliamentary scrutiny continues. On September 16, 2026, committee chair Bhartruhari Mahtab said the government “is not accepting virtual digital assets” and “doesn’t want to regulate it,” while acknowledging that “not regulating it also leaves greater scope for different types of indulgences.”
Final Thoughts
India’s 2026 shift is primarily about reporting rather than tax relief. The 30% VDA tax and 1% TDS remain, while expanded reporting gives authorities a stronger transaction trail. For investors and platforms, crypto compliance is becoming increasingly transparent and data-driven.
Also Read: FAST-DS 2026: Can Indian Taxpayers Disclose Unreported Overseas Crypto?
Disclaimer : Crypto News India does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
