India’s 2026 ITR season has shown a major gap in crypto tax reporting. Many crypto investors think TDS ends their tax work after a transaction. However, TDS does not replace the need to file an ITR. The issue affects investors across India who earned income from crypto transactions during the year.
Punit Agarwal, Founder and CEO of KoinX, shared the finding during this year’s filing season. KoinX data showed only 21.83% of users with crypto TDS filed their tax returns.
Agarwal said, “TDS should be viewed as a checkpoint in the tax process rather than its conclusion.” TDS acts as an advance tax payment under Section 194S. Investors still need to report their crypto income when filing rules apply. Filing also helps eligible taxpayers claim refunds for excess TDS.
The correct ITR form depends on the type of crypto activity. Investors reporting crypto gains as capital gains generally use ITR-2. The regular ITR-2 deadline ended on July 31, 2026. Eligible investors can still file a belated return until December 31, 2026.
Frequent traders may need ITR-3 when their crypto activity counts as business income. This can include certain futures and derivatives trading. Eligible non-audit taxpayers can file ITR-3 until August 31, 2026. Taxpayers requiring an audit generally get time until October 31, 2026.
Schedule VDA remains important for crypto tax reporting in ITR 2026. Investors should report taxable crypto transfers instead of only regular sales. Staking rewards, airdrops, and crypto received as payment also need proper reporting.
Missing the original deadline does not always mean losing a TDS refund. Eligible taxpayers can claim the refund through a correctly filed belated ITR. Accurate crypto details and Schedule VDA reporting remain important for proper tax filing.
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.
