All cryptocurrencies + NFTs + DeFi tokens 30% flat tax. NO loss offset, NO expense deduction, NO carry forward. Schedule VDA in ITR mandatory.
Section 115BBH (introduced FY 2022-23) ALL VIRTUAL DIGITAL ASSETS (VDAs) = cryptocurrencies + NFTs ko 30% FLAT TAX rate par taxes karta hai. KEY: (1) 30% flat (no slab benefit). (2) NO LOSS OFFSET — VDA loss can't offset other income. (3) NO EXPENSE DEDUCTION (except acquisition cost). (4) NO CARRY FORWARD of losses. (5) Plus 4% cess + applicable surcharge. EFFECTIVE: ~31.2-39% depending on slab. INDIA's punitive VDA tax structure — discourage speculation.
VDA covers: (1) Bitcoin, Ethereum, all cryptocurrencies. (2) Stablecoins (USDT, USDC). (3) NFTs (non-fungible tokens). (4) DeFi tokens. (5) Memecoins. (6) ICO tokens. NOT covered: (1) Gift cards (not VDA). (2) Digital media not transferable as asset. (3) Loyalty points. (4) Centralized digital currency (CBDC e-Rupee — separate).
STRICT VDA LOSS RULES: (1) VDA losses CANNOT offset other income (salary, business, capital gains). (2) VDA losses can only offset OTHER VDA GAINS in same year. (3) UNUSED VDA LOSSES — CANNOT carry forward to next year. (4) Each year separate VDA P&L. EXAMPLE: ₹2L Bitcoin profit + ₹3L Ethereum loss = Net ₹1L loss → ZERO offset against salary income. Loss WASTED. STRATEGIC: realize gains + losses same year if possible.
ITR Schedule VDA mandatory for VDA holders: (1) ITR-2 or ITR-3 (depending on income type). (2) Schedule VDA — DETAILED transaction-wise reporting. (3) Each crypto BUY/SELL transaction listed with date, amount, INR value. (4) Acquisition cost + sale proceeds. (5) Net gain/loss computation. (6) 30% tax + cess applied. WALLET ADDRESSES + EXCHANGE DETAILS required if asked. NOT FILING Schedule VDA can trigger 148 reassessment + penalty.
TWO SEPARATE TAXES: (1) SECTION 194S: 1% TDS on VDA transfer at TRANSACTION TIME. Buyer/exchange deducts. (2) SECTION 115BBH: 30% on actual VDA gains computed at year-end. ADJUSTMENT: 1% TDS credited against final 30% tax. EXAMPLE: ₹10L crypto profit. (a) During year: ₹10K TDS (1% on transfers). (b) ITR computation: 30% × ₹10L = ₹3L tax. (c) Less TDS already paid ₹10K. (d) Final payable ₹2.9L.