Cryptos booming in India: But are you losing half in taxes in 2025?
Despite harsh tax rules, India ranks second globally in Bitcoin ownership. But with a 30% flat tax, 1% TDS, and now 18% GST on platform fees, Indian crypto traders face steep compliance challenges in 2025.
- Aug 5, 2025,
- Updated Aug 5, 2025 8:10 PM IST
As Bitcoin prices surge once more, Indian investors are back in action—but with caution. Despite a crypto revival globally, India remains one of the most heavily taxed jurisdictions for digital assets. From a steep 30% tax on crypto gains to 1% TDS on every trade and now 18% GST on exchange services, crypto profits in India are significantly eroded by tax and compliance burdens.
Yet, despite these hurdles, Indian investors hold an estimated 1 million BTC, valued at $115–$120 billion, making the country the second-largest Bitcoin holder globally, just behind the U.S.
Crypto taxation
India introduced a 30% flat tax on income from cryptocurrencies, or Virtual Digital Assets (VDAs), in the Union Budget 2022-23. Since then, the compliance framework has only tightened. In 2025, Indian crypto investors must navigate a four-layer tax system:
| Income Tax (Sec 115BBH) | 30% | Flat tax on crypto profits, no loss offsets allowed |
| Cess | 4% | On top of income tax, making effective rate is 31.2% |
| TDS | 1% | On total sale value, regardless of profit/loss |
| GST (since July 7, 2025) | 18% | On all platform fees, trading, withdrawals, etc. |
Why Bitcoin booms despite harsh taxes
Experts say the rise of grassroots adoption, rather than institutional inflows, drives India’s massive Bitcoin ownership. Over 90 million Indians now hold crypto, with retail investors, high-net-worth individuals, and young traders leading the charge.
“Even with 30% tax and 1% TDS, India ranks #2 globally in Bitcoin holdings,” said Sumit Gupta, Co-founder of CoinDCX. “We just need friendlier policies, taxes, and clearer frameworks.”
Sathvik Vishwanath, CEO of Unocoin, added, “Despite imposing a 30% capital gains tax on crypto profits and a 1% TDS on every transaction, India remains the second-largest country in global Bitcoin ownership. While institutional participation is still evolving due to regulatory uncertainty, grassroots adoption continues to thrive. Over 90 million Indians now hold cryptocurrencies, with Bitcoin leading the pack. High retail interest, rising peer-to-peer activity, and growing participation from young investors and high-net-worth individuals fuel this trend. India also ranks first in global crypto adoption indexes, showing strong engagement despite heavy taxation and legal ambiguity.”
New GST rules
On July 7, 2025, major exchange Bybit began charging 18% GST on all crypto-related services for Indian users. This includes:
Spot and futures trading fees
Staking rewards and yield farming
Swaps, token conversions, and withdrawals
Fiat deposits, card-based transactions, and more
This follows a government directive that all exchanges serving Indian users must register under GST law and report activity to authorities. While GST doesn’t apply directly to profits, it adds a cost layer to every platform interaction—especially for high-frequency traders.
What you must do as a crypto investor in India
Report everything: All holdings and trades must be declared in Schedule VDA in your ITR.
Track your TDS: Monitor 1% deductions via Form 26AS or your exchange’s reports.
Avoid over-trading: Frequent trades rack up GST, fees, and TDS. Batch trades to reduce friction.
Use tax software: Tools like KoinX, CoinTracker, and Cleartax Crypto can automate compliance.
Consider crypto ETFs: ETFs offer long-term tax benefits and allow loss set-offs, unlike direct crypto trades.
Penalties for non-compliance
From February 1, 2025, undeclared crypto gains can attract up to 60% punitive tax, plus interest and prosecution. Authorities are actively scanning data from major exchanges like Binance, OKX, and Bybit.
If you’re still trading crypto in 2025, the message is clear: profit smart, report smarter.
As Bitcoin prices surge once more, Indian investors are back in action—but with caution. Despite a crypto revival globally, India remains one of the most heavily taxed jurisdictions for digital assets. From a steep 30% tax on crypto gains to 1% TDS on every trade and now 18% GST on exchange services, crypto profits in India are significantly eroded by tax and compliance burdens.
Yet, despite these hurdles, Indian investors hold an estimated 1 million BTC, valued at $115–$120 billion, making the country the second-largest Bitcoin holder globally, just behind the U.S.
Crypto taxation
India introduced a 30% flat tax on income from cryptocurrencies, or Virtual Digital Assets (VDAs), in the Union Budget 2022-23. Since then, the compliance framework has only tightened. In 2025, Indian crypto investors must navigate a four-layer tax system:
| Income Tax (Sec 115BBH) | 30% | Flat tax on crypto profits, no loss offsets allowed |
| Cess | 4% | On top of income tax, making effective rate is 31.2% |
| TDS | 1% | On total sale value, regardless of profit/loss |
| GST (since July 7, 2025) | 18% | On all platform fees, trading, withdrawals, etc. |
Why Bitcoin booms despite harsh taxes
Experts say the rise of grassroots adoption, rather than institutional inflows, drives India’s massive Bitcoin ownership. Over 90 million Indians now hold crypto, with retail investors, high-net-worth individuals, and young traders leading the charge.
“Even with 30% tax and 1% TDS, India ranks #2 globally in Bitcoin holdings,” said Sumit Gupta, Co-founder of CoinDCX. “We just need friendlier policies, taxes, and clearer frameworks.”
Sathvik Vishwanath, CEO of Unocoin, added, “Despite imposing a 30% capital gains tax on crypto profits and a 1% TDS on every transaction, India remains the second-largest country in global Bitcoin ownership. While institutional participation is still evolving due to regulatory uncertainty, grassroots adoption continues to thrive. Over 90 million Indians now hold cryptocurrencies, with Bitcoin leading the pack. High retail interest, rising peer-to-peer activity, and growing participation from young investors and high-net-worth individuals fuel this trend. India also ranks first in global crypto adoption indexes, showing strong engagement despite heavy taxation and legal ambiguity.”
New GST rules
On July 7, 2025, major exchange Bybit began charging 18% GST on all crypto-related services for Indian users. This includes:
Spot and futures trading fees
Staking rewards and yield farming
Swaps, token conversions, and withdrawals
Fiat deposits, card-based transactions, and more
This follows a government directive that all exchanges serving Indian users must register under GST law and report activity to authorities. While GST doesn’t apply directly to profits, it adds a cost layer to every platform interaction—especially for high-frequency traders.
What you must do as a crypto investor in India
Report everything: All holdings and trades must be declared in Schedule VDA in your ITR.
Track your TDS: Monitor 1% deductions via Form 26AS or your exchange’s reports.
Avoid over-trading: Frequent trades rack up GST, fees, and TDS. Batch trades to reduce friction.
Use tax software: Tools like KoinX, CoinTracker, and Cleartax Crypto can automate compliance.
Consider crypto ETFs: ETFs offer long-term tax benefits and allow loss set-offs, unlike direct crypto trades.
Penalties for non-compliance
From February 1, 2025, undeclared crypto gains can attract up to 60% punitive tax, plus interest and prosecution. Authorities are actively scanning data from major exchanges like Binance, OKX, and Bybit.
If you’re still trading crypto in 2025, the message is clear: profit smart, report smarter.