How to report crypto in your ITR: Schedule VDA, step by step

Step 1: Pick the right form

Crypto gains cannot go in ITR-1 or ITR-4. Use ITR-2 if you invest and have no business income, or ITR-3 if you treat crypto trading as a business. The AY 2026-27 ITR-2 notified by CBDT contains a "Schedule VDA — Income from transfer of Virtual Digital Assets", and its note says details of every transfer must be filled in. CBDT notification 46/2026.

Step 2: Gather your records

• Tax / P&L statements from every exchange you used (most Indian exchanges provide one for the financial year).
• Wallet histories for self-custody and transfers between platforms.
• Form 26AS and AIS from the income tax portal, which show the 1% TDS deducted on your sales.
• Prices in INR at the time of each crypto-to-crypto swap (a swap is a transfer too).

Step 3: Fill Schedule VDA line by line

For each transfer you enter: date of acquisition, date of transfer, head of income (capital gain or business income), cost of acquisition, and sale consideration. The schedule works out the income per row.

• Only the cost of acquisition is deductible. Exchange fees, internet bills or advisory costs are not deductions under the VDA rule.
• A loss row counts as zero. Losses on one asset cannot reduce gains on another, and they cannot be carried forward.
• Holding period does not matter. There is no long-term rate for VDAs; the rate is a flat 30% plus surcharge and 4% cess.

Worked example

Taxable VDA income is ₹75,000. Tax at 30% is ₹22,500; with 4% cess it is ₹23,400 (before any surcharge). The ₹20,000 ETH loss does not reduce it. If 1% TDS of ₹3,750 was deducted on the three sales (1% of ₹3,75,000 total consideration), you claim it as credit and pay the remaining ₹19,650. Run your own numbers in the BtcMedia tax calculator.

Step 4: Claim your TDS

The 1% TDS is not an extra tax; it is credit against your final bill. Check the amounts in Form 26AS/AIS match your exchange statements before filing. Mismatches are a common reason for notices. For who deducts it, the ₹10,000/₹50,000 thresholds and how much cash it locks up for active traders, see our 1% TDS on crypto guide and calculator.

Step 5: Don't forget the edge cases

• Airdrops, staking and mining rewards may be taxable as income when received; get professional advice on how to classify them.
• Crypto on foreign platforms may need disclosure in Schedule FA (foreign assets) if you are a resident.
• Missed earlier years? An updated return (ITR-U) lets you correct past returns by paying additional tax.

Deadlines and what changes next year

The original due dates for AY 2026-27 have passed. A belated return can generally be filed up to 31 December 2026, with a late fee and interest on unpaid tax. From 1 April 2026 the Income-tax Act, 2025 applies, replacing "assessment year" with "tax year". The 30% rule moves to section 194 and TDS to section 393; the substance is the same (Mint, PIB).

This guide is general information, not tax advice. For complex cases (business income, large volumes, foreign platforms), consult a chartered accountant.