How to report crypto in your ITR: Schedule VDA

Crypto income goes in Schedule VDA of your income-tax return, one line per transfer, in ITR-2 (if you hold as an investor) or ITR-3 (if you trade as a business). You cannot use ITR-1 or ITR-4. For each transfer you give the dates of acquisition and transfer, the cost, the sale consideration and the income. Only cost is deductible, losses are ignored, and the 1 percent TDS on your sales is claimed as credit.

Step 1: Gather your data

Before you open the portal, collect a full transaction history from every platform you used in the financial year, not just the one you use most. Exchanges usually give a tax report, but treat it as a draft. It often misses swaps between platforms and transfers to your own wallet.

• Download the Annual Information Statement (AIS) and the tax credit statement from the e-filing portal and see which VDA sales and TDS entries are already linked to your PAN.
• List every transfer: sale, swap, spending crypto, and NFT sale or exchange.
• For each, note the buy date, the sell date, the rupee cost and the rupee value received.
• Keep bank statements as proof of the rupee cost of purchases.

Step 2: Choose the right form and head of income

The rate of 30 percent is the same either way, but the form depends on the head under which you report.

• Investor, no business income: report under capital gains, usually in ITR-2.
• Regular trader or business income from crypto, or other business or professional income: report under profits and gains of business or profession, in ITR-3.

Salaried people with a few trades are usually investors. If you trade daily as your activity, take advice, because it affects form choice and record keeping. Whichever head you pick, be consistent across years and be able to explain it.

Step 3: Fill Schedule VDA line by line

Schedule VDA has a separate entry for each transfer. Take Meera, who made three transfers in the year.

She reports all three. Her taxable VDA income is ₹1,20,000 (₹90,000 plus ₹30,000). At 30 percent that is ₹36,000, plus 4 percent cess of ₹1,440, a total of ₹37,440. The loss on Coin B does not reduce it. The cost of Coin D for the future is ₹80,000, and Meera should record that now.

Do not use a lower rate, do not claim indexation and do not deduct fees, internet or software against VDA income. The department’s outreach in 2025 specifically flagged non-filing of Schedule VDA, lower rates and disallowed deductions.

Step 4: Claim TDS and pay the balance

The 1 percent TDS on your sales is not final tax. It appears in your AIS and annual tax statement, and you claim credit for it in the return. If you sold at a loss, TDS may exceed your tax on VDA, and the excess comes back as a refund.

If your total tax after TDS is ₹10,000 or more, advance tax is due in instalments: 15 percent by 15 June, 45 percent by 15 September, 75 percent by 15 December and 100 percent by 15 March. Employer TDS covers only salary, so a big crypto gain in autumn must be covered in the December and March instalments. Interest applies on shortfalls. Pay any balance as self-assessment tax before filing.

Foreign platforms and foreign assets

Residents are taxed on worldwide income. If you traded on a foreign exchange, no Indian TDS was cut, and you must compute and pay the tax yourself, and report those transfers in Schedule VDA. Whether crypto held on a foreign exchange must also be shown in the foreign assets schedule (Schedule FA) is not clearly settled, because crypto has no fixed location. Many advisers suggest disclosing it. Ask your chartered accountant, because the undisclosed foreign assets law carries heavy penalties.

If you missed something

1. Return not yet filed for FY 2025-26: the original due dates were 31 July 2026 for ITR-2 and 31 August 2026 for non-audit ITR-3. A belated return can still be filed up to 31 December 2026, with a late fee and interest. Check the portal for any extension.
2. Error in a filed return: file a revised return within the time allowed by the Act. The 2026 Budget changes were reported to move the last date for a revised return from 31 December to 31 March, with a fee for the extra period. Check the current limit on the portal.
3. Income missed after the time for revision: an updated return (the old section 139(8A)) is available within 48 months from the end of the relevant assessment year, on payment of additional tax. It cannot be used to reduce income or increase a refund.
4. Department email about unreported VDA: log in to the portal yourself, check the message and respond with documents. See our guide on the 30 percent tax and 1 percent TDS for the computation.

Correcting voluntarily is almost always cheaper than waiting for a notice. Returns for tax year 2026-27 will be filed in 2027 under the Income-tax Act, 2025 and its new forms. Expect equivalent transaction-wise VDA reporting, and read the instructions for the form you use.

Receipts that are not in Schedule VDA

Gifts above ₹50,000 from non-relatives, salary or fees paid in crypto, and similar receipts are taxed at slab rates as income, not through the 30 percent rule. They are reported under the relevant head of income, and the later sale of those coins is a VDA transfer. Read our guide on NFTs, airdrops, staking and gifted crypto for the unsettled areas.

For the full toolkit, see the Crypto and VDA Law and Tax course.

Frequently asked questions

Which ITR form should I use if I have crypto income?

ITR-2 for capital gains without business income, ITR-3 if you have business or professional income. ITR-1 and ITR-4 cannot be used.

Do I have to file a return if I only had a loss on crypto?

If TDS was deducted and you want a refund, yes. Even otherwise, reporting the transfers keeps your return consistent with the data the department already holds.

Are transfers between my own wallets reported?

They are not sales, so they produce no income, but keep proof that both wallets are yours to explain them if asked.

Can I claim exchange fees as expenses?

Not against VDA income. Only cost of acquisition is allowed. Whether a buy-side fee forms part of cost is debated, so be conservative and consistent.

What if my exchange has shut down?

Rebuild the history from your bank statements, your saved reports and the public blockchain records, and keep downloading statements regularly in future.

Is Schedule VDA the same under the new Act?

The substance carries over. The Income-tax Act, 2025 applies to tax year 2026-27 returns, so check the form notified for that year.

Quick quiz

Sources

• Income-tax Act, 1961: section 115BBH, section 194S, section 139 (belated, revised and updated returns), section 208 and 211 (advance tax)
• Income-tax Act, 2025: section 2(111), section 194, section 393(1) table serial 8(vi)
• Income Tax Department ITR-2 and ITR-3 instructions (Schedule VDA)
• Finance Act, 2026 (revision of returns) and Union Budget 2026 statements on VDA reporting
• Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

This page is for education and general information, not legal advice for a specific case. Law as on 7 November 2026.