How Is Crypto Income Shown in the ITR Form in India?

Crypto income in the ITR form in India is declared through a dedicated Schedule VDA (Virtual Digital Assets), introduced for Assessment Year 2023-24 and retained in the ITR forms for AY 2026-27. Every Indian resident who has transferred a VDA during the financial year - whether by selling, swapping, spending, or gifting - must complete this schedule. This article explains which ITR form to use, how Schedule VDA is filled in line by line, where staking and airdrop income is declared, how TDS credits are reconciled, and what supporting documentation the ITD expects. Verified against Income Tax Act 2025 and AY 2026-27 ITR forms;.

Which ITR Form Do Indian Crypto Users Need to File?

The correct ITR form for crypto income in India depends on your overall income sources - not on the type or size of your crypto activity.

ITR-2: For individuals and HUFs with income from salary, house property, capital gains, or other sources - but without business income. Most retail crypto investors file ITR-2.
ITR-3: For individuals and HUFs who have income from a business or profession in addition to crypto. Active day-traders classified as running a business must file ITR-3.
ITR-1 (Sahaj) is not applicable: ITR-1 explicitly excludes taxpayers with VDA income - even a single crypto trade disqualifies you from ITR-1.
ITR-4 (Sugam) is not applicable: Similarly excludes VDA income.
Deadline: 31 July of the assessment year for non-audit cases; 31 October for audit cases (ITR-3 filers with business income above the audit threshold).

How Is Schedule VDA Filled in the ITR?

Schedule VDA in the ITR requires a separate line entry for every VDA transfer made during the financial year - not a single aggregate figure.

Each entry in Schedule VDA captures:

Name or description of the VDA: e.g., Bitcoin, Ethereum, USDT, SOL.
Date of acquisition: The date you originally purchased the VDA.
Date of transfer: The date you sold, swapped, spent, or gifted it.
Cost of acquisition: The INR price paid to purchase the VDA (the only permitted deduction).
Sale consideration / FMV: The INR amount received, or the Fair Market Value in INR at the time of transfer for crypto-to-crypto swaps.
Gain or loss: Automatically computed as Sale Consideration - Cost of Acquisition.
Tax payable at 30%: Computed on the gain; losses on individual entries are shown but cannot be set off.

Key rule: Each transfer must be entered individually - there is no provision to net gains and losses across entries. Every profit entry generates a 30% tax liability; every loss entry stands alone with no offset value.

Where Is Staking, Mining, and Airdrop Income Declared in the ITR?

Income received from crypto activities before any sale is not declared in Schedule VDA - it goes into a separate income head.

Staking rewards: Declared as Income from Other Sources in the relevant schedule, at the Fair Market Value in INR on the date of receipt.
Mining income: Also declared as Income from Other Sources at FMV on the date the coins are credited.
Airdrops: Declared as Income from Other Sources at FMV on the date of receipt.
Tax rate on receipt: Taxed at the applicable income tax slab rate for that financial year - not at the flat 30% VDA rate.
Subsequent disposal: When the staked/mined/airdropped coins are later sold or swapped, that disposal is entered in Schedule VDA at the 30% flat rate, with the FMV at receipt as the cost of acquisition.

How Are TDS Credits Reconciled in the ITR?

TDS on crypto in the ITR must be reconciled against Schedule VDA tax computed, and any shortfall paid or excess refunded.

Check Form 26AS: All TDS deducted by exchanges under Section 194S appears in Form 26AS under the relevant financial year.
Check AIS: The Annual Information Statement now shows VDA transaction details reported by exchanges - cross-reference this with your own records before filing.
Claim TDS credit in ITR: Enter the TDS amount in the Tax Credit section of the ITR - this is credited against the total tax payable.
Pay advance tax if required: If expected total crypto tax liability exceeds ₹10,000 for the year, advance tax instalments are required - failure to pay leads to interest under Sections 234B and 234C.
Self-assessment tax: Any balance between total tax liability and TDS + advance tax paid must be settled as self-assessment tax before filing.

What Supporting Documentation Should Indian Crypto Filers Keep?

The ITD now receives exchange-level transaction data under Section 509 - your records must be consistent with what they hold.

Exchange transaction history: Download full CSV or PDF export of all trades, swaps, and withdrawals for the financial year from each exchange used.
INR FMV records for swaps: For crypto-to-crypto swaps, retain the INR exchange rate or FMV at the exact time of each swap.
Wallet-to-wallet transfer records: Keep evidence that self-transfers between your own wallets are not taxable transfers - wallet ownership proof.
Foreign exchange records: For trades on international platforms like Binance or Coinbase, maintain complete transaction records and the INR equivalent at time of trade.
Staking and airdrop receipts: Dates and FMV for every staking reward or airdrop credited during the year.

Frequently Asked Questions
Which ITR form should a salaried person with crypto income file in India?

A salaried person with crypto income should file ITR-2, which covers salary income alongside VDA transfer income declared in Schedule VDA. ITR-1 (Sahaj) explicitly excludes taxpayers with VDA income, even a single small trade - so switching to ITR-2 is mandatory the moment any crypto transfer occurs. If crypto trading constitutes a business activity, ITR-3 applies instead.

Does every single crypto trade need a separate entry in Schedule VDA?

Yes - each VDA transfer must be entered as a separate line item in Schedule VDA, with individual acquisition date, transfer date, cost of acquisition, and sale consideration. There is no provision to aggregate or net trades - each profitable entry generates its own 30% tax, and loss entries, while declared, provide no offset. For high-frequency traders with hundreds of swaps, crypto tax tools like KoinX or ClearTax can generate a Schedule VDA-compliant report automatically.

What happens if the details in my ITR don't match the exchange data the ITD has received?

From 1 April 2026, FIU-registered exchanges submit user-level transaction statements to the ITD under Section 509. If the figures in your Schedule VDA don't reconcile with what the exchange has reported, the mismatch is flagged by the ITD's Project Insight AI system - potentially triggering a notice under Section 148A. This makes it essential to use your exchange's transaction export as the primary source for ITR filing, not estimates or summaries.

Conclusion: Why Accurate Schedule VDA Filing Is the Single Most Important Crypto Compliance Step in India

Understanding how crypto income is shown in the ITR form in India is not optional in 2026 - it is the central compliance act for every VDA holder. Schedule VDA requires trade-by-trade precision, staking and airdrop income separately declared as other sources, TDS credits carefully reconciled from Form 26AS and AIS, and supporting documentation that can withstand cross-checking against Section 509 exchange data. For most retail investors, ITR-2 with a crypto tax tool-generated Schedule VDA is the most accurate and defensible filing approach. File every transfer, reconcile every TDS credit, and submit before the 31 July deadline - the ITD's data on your activity is already waiting for your return.

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This release was published on openPR.