Section 115BBH (30% crypto tax)

Section 115BBH of India's Income-tax Act, 1961 set the special tax regime for income from the transfer of virtual digital assets (VDAs), including cryptocurrencies and NFTs. It was introduced by the Finance Act, 2022 and applied from 1 April 2022 (assessment year 2023-24 onwards).

Under it, gains from transferring a VDA are taxed at a flat 30%, plus applicable surcharge and 4% health and education cess, whatever your income slab and however long you held the asset. The only deduction allowed is the cost of acquisition; expenses such as exchange fees, internet costs or interest cannot be deducted. Losses from VDA transfers cannot be set off against any other income, including gains from other VDAs, and cannot be carried forward to later years.

This makes crypto one of the most heavily taxed asset classes in India. Gains are reported transaction by transaction in Schedule VDA of the income tax return.