Indian taxation on cryptocurrencies is governed by Section 115BBH of the Income Tax Act, introduced in 2022. The Indian government applies some of the world's strictest legislation regarding Virtual Digital Assets (VDA).

India has chosen to heavily tax gains without allowing the deduction of losses. This guide explains the Indian tax mechanics for individuals and the steps to follow on Waltio to generate a report perfectly adapted to these very specific rules.

In India, crypto gains are taxed at a flat rate of 30%, plus a surcharge (Cess) of 4%, bringing the effective rate to approximately 31.2%.

This is the most important rule in India: you cannot use your losses to reduce your gains.

To monitor the market, India has implemented a 1% TDS. Every time you sell or exchange a crypto, 1% of the total transaction amount is deducted at the source (often directly by the exchange) and sent to the government. This deducted amount can be offset against your final tax liability during your filing.

Waltio's calculation engine will determine your gross capital gains transaction by transaction, allowing you to declare your gains without subtracting your losses, as required by Indian law.

The Indian tax administration considers any "transfer" of a digital asset as a taxable event. Therefore, exchanging one cryptocurrency for another (e.g., selling BTC for ETH or a stablecoin) triggers the 30% tax on the capital gain realized at the time of the swap.

Great news: Waltio's behavior is perfectly aligned with the strict Indian law. The software automatically considers each Crypto-to-Crypto exchange operation as taxable and calculates the capital gain realized at the second of the swap.

In India, airdrops, staking income, or mining rewards are generally considered gifts or "Income from other sources." The law stipulates that they are taxable upon receipt, valued at the token's fair market value on that day, according to the standard income tax brackets.

To simplify global accounting tracking, Waltio applies a specific methodology by default:

Practical consequence: Taxation is deferred. It is only when you decide to sell these tokens (from staking or airdrops) that the operation becomes taxable. Since the acquisition price is 0, the entire disposal amount will be considered a capital gain and taxed at 30%.

To account for tax upon receipt (Strict Compliance): If you wish to declare this income in the exact year of receipt to respect the letter of the Indian tax code, manual intervention is required on Waltio. You will need to individually modify each passive gain transaction to enter its acquisition price (i.e., the token's market price on the exact day of receipt). This way, the acquisition value will no longer be 0, and the operation will be recorded as immediate income.

Any exit to traditional currency triggers the 30% flat taxation:

As soon as a transaction corresponds to a Fiat exit (or a crypto-crypto swap), Waltio will isolate the generated capital gain.

India has a fiscal calendar shifted from the European calendar year.

Disclaimer: This guide is provided for informational and educational purposes only. Legislation surrounding digital assets is subject to interpretation and can evolve very quickly. Waltio does not provide tax or legal advice. We strongly recommend consulting a certified Chartered Accountant in India to validate your personal situation and manage the complexity of TDS.