Gifting crypto in India

Since 1 April 2022, virtual digital assets are covered by India's gift tax rules under section 56(2)(x) of the Income-tax Act, 1961. If you receive crypto without paying for it, or for less than its fair market value, and the total value of such gifts from non-relatives exceeds ₹50,000 in a year, the recipient is taxed on the value as income from other sources.

The standard exemptions for gifts apply: gifts from relatives as defined in the law (such as spouse, parents, siblings and their spouses), gifts received on marriage, and inheritances are not taxed in the recipient's hands. Airdrops and some rewards may also fall under these rules, depending on the facts.

Even when the gift itself is exempt, when the recipient later sells the crypto the gain is taxed at 30% under the VDA rules. For a gift that was taxed on receipt, its value is generally treated as the cost; otherwise the previous owner's cost generally applies. Keep records of the date and value of every gift.