Bitcoin ETF vs bitcoin: tax calculator for India
By BtcMedia Research · Updated
In India, a bitcoin gain is taxed at 30% plus 4% cess and a loss can’t be used anywhere. Units of a US spot Bitcoin ETF, such as BlackRock’s IBIT, are treated by tax experts as a foreign security, not a VDA: 12.5% plus cess if held more than 24 months, your slab rate if sold sooner. This calculator puts both routes side by side, with fund fees, currency costs and TCS.
From real prices: ₹1,00,000 of bitcoin bought on 11 Jan 2024, the day US spot Bitcoin ETFs began trading, was worth ₹1,90,421 at the 30 Oct 2026 close. Sold directly, the tax is ₹28,211. Held in an ETF at IBIT’s 0.25% annual fee, the same position is a long-term gain taxed ₹11,582, leaving ₹15,298 more in hand after tax.
Your numbers
Pre-filled with the example above. Put in your own amount and dates.
The ETF tracks the bitcoin price, so use one value for both routes. The calculator takes off the fees and costs itself.
IBIT’s sponsor fee is 0.25% a year.
Charged when you send money out and again when you bring it back. Ask your bank and broker; blank = 0.
For TCS: 20% on the part of the year’s total above ₹10 lakh.
Result
The ETF route leaves you ₹15,298 more after tax: ₹1,77,508 against ₹1,62,210 holding bitcoin directly. Held over 24 months, the ETF gain is taxed at 13% (12.5% + cess) against 31.2% on bitcoin. It stays ahead only while your broker and currency costs stay under 4.76% each way.
| Bitcoin, held directly | US Bitcoin ETF | |
|---|---|---|
| Sale proceeds | ₹1,90,421 | ₹1,89,090 |
| Gain / loss | +₹90,421 | +₹89,090 |
| Tax rate | 31.2% | 13% |
| Tax | ₹28,211 | ₹11,582 |
| In hand after tax | ₹1,62,210 | ₹1,77,508 |
| Cash held until you file (credited back) | TDS ₹1,904 | TCS ₹0 |
| Loss usable against other gains? | No | Yes |
Assumptions: individual, resident; bitcoin held directly pays 31.2% on the gain, losses can’t be used, 1% TDS on the sale value (a credit); ETF units treated as not a VDA; more than 24 months = 12.5% + cess, otherwise slab + cess; ETF value = bitcoin value less the annual fee and the cost each way; no surcharge, no Indian exchange trading fees. Dollar figures at USD/INR 94.95 (30 Oct 2026).
₹1 lakh bought on different days, sold on 30 Oct 2026
Real bitcoin prices in rupees; ETF = the same price less the 0.25% annual fee; 30% slab; zero broker cost.
| Bought | Worth | ETF gain | Tax: bitcoin | Tax: ETF | ETF leaves you |
|---|---|---|---|---|---|
| 11 Jan 2024 | ₹1,90,421 | long-term, 13% | ₹28,211 | ₹11,582 | +₹15,298 |
| 31 Oct 2024 | ₹1,24,128 | short-term, slab | ₹7,528 | ₹7,335 | −₹426 |
| 1 Apr 2025 | ₹1,00,491 | short-term, slab | ₹153 | ₹29 | −₹273 |
| 31 Oct 2025 | ₹75,403 | loss (usable) | ₹0 | ₹0 | −₹188 |
The 24-month cliff: An ETF bought on 31 Oct 2024 hasn’t passed 24 months by 30 Oct 2026: at the 30% slab its tax is ₹7,335, about the same as bitcoin held directly (₹7,528). From 1 Nov 2026 the same sale is long-term, and at the same price the tax is ₹3,056. Over short holds the fee even leaves the ETF slightly behind, and at a loss neither route pays tax, but only the ETF loss can be used later.
Prices: Bitstamp daily close (UTC) × ECB USD/INR, ₹73.29 lakh per BTC on 30 Oct 2026. A real ETF’s price can drift slightly from bitcoin’s.
When each route wins
- Planning to hold more than 2 years and expecting a gain: the ETF’s 13% makes a real difference, as long as broker and currency costs stay low.
- Selling within 2 years at the 30% slab: the ETF saves nothing and costs fees.
- Lower slab (say 10-20%) and a short hold: even the ETF’s short-term tax is below 31.2%.
- Small, frequent buys: an Indian exchange is simpler; each ETF top-up means another remittance and its costs.
- Above $60,000: don’t use the ETF route without understanding US estate tax.
Read more: A US Bitcoin ETF bought from India is taxed at 13% after two years · Schedule FA for foreign holdings
FAQ
How is a US Bitcoin ETF taxed for an Indian resident?
Sold after more than 24 months, the gain is long-term: 12.5% plus 4% cess = 13%, with no indexation and without the ₹1.25 lakh exemption that Indian listed shares get. Sold within 24 months, the gain is added to your income and taxed at your slab rate. All of this rests on the reading that ETF units are not VDAs.
Could a Bitcoin ETF be taxed at the 30% crypto rate?
Yes, if the government notifies spot Bitcoin ETFs as virtual digital assets. Tax experts say that has not happened so far. It is the biggest risk to this route.
How much TCS is collected when I buy an ETF through LRS?
Nothing while the year’s total LRS remittances (other than for education and medical treatment) stay within ₹10 lakh, then 20% on the excess. Budget 2026 left the rate for investment unchanged. TCS is not a cost: it shows in Form 26AS and is set against your tax or refunded when you file.
What if the ETF falls?
An ETF loss is a capital loss: a short-term loss can be set off against any capital gain, a long-term loss only against long-term gains, and both can be carried forward 8 years if you file on time. A loss on directly held crypto can’t be set off at all.
What are the hidden costs of the ETF route?
The fund’s annual fee (0.25% for IBIT), broker and currency conversion costs, cash locked in TCS, reporting the holding in Schedule FA every year, and US estate tax: India has no estate-tax treaty with the US, and US assets above $60,000 can face up to 40%.
Sources: Taxmann: Bitcoin ETF taxation · Business Today: tax on foreign ETFs · PIB: Budget 2026, TCS on LRS · HDFC Bank: TCS on LRS from 1 April 2026 · iShares: IBIT fee · IRS: Form 706-NA ($60,000) · Prices: Bitstamp daily close × ECB USD/INR. Rules checked on 31 October 2026.
Not tax or investment advice. This is an educational estimate. The ETF’s tax treatment could change with one government notification. Talk to a chartered accountant before you send money abroad.
Related: Crypto tax calculator · Crypto loss set-off calculator · NRI crypto tax calculator · If you had invested in bitcoin · Crypto price on any date
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- Tool launched: US spot Bitcoin ETF (bought through LRS) vs bitcoin held directly, after Indian tax. 31.2% with no loss set-off vs 13% after 24 months or slab + cess before, with the ETF fee, broker/currency cost each way and break-even cost, 20% TCS above ₹10 lakh a year, the 1% TDS credit, the 24-month cliff date, and warnings for the $250,000 LRS cap and the $60,000 US estate-tax threshold. Real-price example from ETF launch day (11 Jan 2024).