India’s tax department has issued 44,000+ notices and detected ₹888+ crore ($104M) in undisclosed crypto income during FY 2025-26.
A lot of people bought crypto in the last 2 years.
Most of them have no idea what they’ve signed up for on the tax side.
Let me be direct about where things stand in FY 2026-27.
The government has already issued 44,000 notices.
They’ve detected ₹888 crore in undisclosed crypto income.
And from April 2026, exchanges that don’t report your transactions get hit with ₹200 per day in penalties – which means every platform you use is now under pressure to hand over your data.
They already know. The question is whether you’ve reported it correctly.
Here’s what the 30% tax actually means in practice.
You pay 30% on every gain. No deductions. No exemptions.
Made ₹50,000 on one coin and lost ₹40,000 on another?
You still pay tax on the ₹50,000. The loss doesn’t offset anything.
That’s not a loophole. That’s the law.
I’ve spoken to founders and young professionals who treated crypto like a side investment and never thought about the tax trail they were leaving.
That conversation is getting harder to have the longer you wait.
If you’ve traded crypto in FY 2025-26, here’s what to do right now.
Pull your transaction history from every exchange.
Calculate gains trade by trade.
Report it correctly in your ITR.
Don’t assume small amounts fly under the radar.
The Income Tax Act, 2025 came into force on April 1, 2026, replacing the 1961 Act. For investors filing for FY 2025-26, the old Act’s provisions still govern your obligations. The core framework remains intact: a flat 30% tax on profits from Virtual Digital Assets, a 1% TDS on transfers exceeding Rs 10,000, no deductions except the cost of acquisition, and no ability to offset losses from one crypto asset against gains from another.
The new Act renumbers the governing sections and explicitly adds “crypto-asset” to the VDA definition, but the substance of the obligations has not changed. If you have been filing correctly under the old Act, the transition requires no dramatic adjustment. What has changed is the penalty framework, and that deserves your attention.
The Right Form, Filled CorrectlyFor FY 2025-26, investors file under ITR-2 if reporting crypto as capital gains or ITR-3 if crypto trading constitutes business income. Both forms contain a dedicated Schedule VDA section where all crypto transactions must be reported.This is the step where most errors happen.
Schedule VDA requires transaction-by-transaction entry, not just a summary of your net gains. Every trade, every swap, every disposal needs to be listed individually. Investors who have traded across multiple platforms, used DeFi protocols, or moved assets between wallets will find this the most demanding part of the process. The data needs to be accurate, complete, and consistent with what your exchange has already reported.