Crypto in ITR: How to File Crypto Trading, F&O, and Gift Income

Cryptocurrency has become extremely popular in India. It is exciting, fast-moving, and full of opportunities. But like any investment, taxes are a crucial part of the journey. Whether you are trading, investing in futures and options (F&O), or receiving crypto as a gift, you must accurately report your crypto income. 

This may seem very overwhelming, especially for beginners. But don’t worry, Giottus has you covered. In this blog, we will break down how crypto taxation works in India, explain the rules for different transactions, and look at the key steps to keep in mind while filing your taxes. 

Understanding Crypto Taxation in India

Many investors enter the crypto world simply to buy at a lower price and sell at a higher one. In India, profits from such trades are classified as VDA gains and are taxed under Section 115BBH.

The rules are very simple:

1. Flat 30% tax will be levied on all gains from crypto, plus surcharge and 4% cess.
2. 1% TDS applies to transfers of more than ₹50,000 a year (₹10,000 in some cases).
3. No deductions allowed for expenses like trading fees only the cost of purchase is deductible.

Unlike stocks, there is no benefit for long-term holdings. So, a ₹1 gain is taxed the same way as a ₹1,00,000 gain at 30%. If one tries to evade these it may lead to penalties, audits, and even prosecution.

In July 2025, the Indian government also introduced 18% GST on platform fees like exchange charges. While this doesn’t change the 30% tax on gains, it increases overall costs slightly. So, the investors must keep this in mind when calculating net returns.

Investors must always plan and record-keeping. Maintaining a clear log of dates, purchase amounts, sale values, and market prices helps avoid disputes and ensures smoother ITR filing.

Filing Crypto Trading Income

Many investors enter the market aiming to profit from short-term price movements. Profits from such trades are treated as VDA gains and taxed at 30%.

In some cases, if trading is very frequent and resembles a business activity, the Income Tax Department may classify it as business income. This would make it taxable at regular slab rates, with certain expenses allowed as deductions. However, for the majority of retail investors, the rules under Section 115BBH continue to apply.

So, how to you file crypto trading income:

1.Calculate Your Gains: Subtract the acquisition cost from the sale price for each transaction. Maintain a scrip-wise ledger detailing dates, asset types, costs, and sale values, as required for ITR reporting.

2. Use a Crypto Tax Calculator: These tools automate calculations, factoring in buy/sell prices, fees, and current tax rules. They help spot errors and highlight tax-saving opportunities.

3. Report in ITR: Include your gains in Schedule VDA of ITR-2 or ITR-3. List each transaction’s details, date, asset, cost, transfer value, and gain. File early and review for accuracy to avoid notices.

Handling Crypto Futures and Options (F&O)

Crypto F&O trading, like stock derivatives, involves agreements to buy or sell at a set price in the future. 

Unlike traditional F&O, which is often taxed as speculative business income, crypto F&O gains fall under VDA rules, attracting the 30% tax. If your overall crypto activity qualifies as a business, you might report it under ‘Income from Business or Profession’, allowing expense deductions

Tax Rules for Crypto F&O

1. Gains are taxed at 30% under VDA rules.
2. If classified as business income, file under “Income from Business or Profession” and claim allowable expenses.
3. Losses cannot offset gains or be carried forward under VDA rules.

Steps to File F&O Income

1. Calculate Net Profit: Tally all F&O transactions to determine gains. For example, if you earn ₹50,000 from F&O trades, you pay ₹15,000 tax at 30%. Note that fees are not deductible under VDA rules unless classified as business income.
2. Report in ITR: Use Schedule VDA for VDA gains or the “Income from Business or Profession” section for business income. Document all costs to support deductions during audits.

It is important to note that losses from one trade cannot be set off against gains from another, nor can they be carried forward. Each transaction is considered individually.

Also read: India’s Crypto Regulations Under PMLA: Where We Stand in 2025

Taxing Crypto Gifts

Crypto gifts are also covered by Indian tax law. Let’s say you receive a gift worth over ₹50,000 from a non-relative, it is taxed as Income from Other Sources at your slab rate. Interestingly, gifts from relatives (parents, spouse, siblings) are exempt. When you decide to sell the gifted crypto later, the 30% VDA tax applies, using the gift’s fair market value as the cost basis.

Steps to file gift income:

1. Check the value: Note the market value on the day you received it.
2. Report in ITR: Add it under ‘Income from Other Sources’ if applicable.
3. Maintain proof: Keep records of who gifted it and its value.

Other Taxable Crypto Transactions

Beyond trading, F&O, and gifts, other crypto activities are taxable:

1. Staking Rewards/Lending Interest: Taxed as Income from Other Sources at your slab rate when received. Selling staked crypto triggers 30% VDA tax on gains.
2. Payments in Crypto: If you receive crypto as payment for goods/services, it’s taxed as business/professional income at slab rates. Using crypto for payments triggers 30% VDA tax on gains (sale value minus acquisition cost).
3. Mining Income: Taxed as Income from Other Sources or business income at slab rates when received. Selling mined crypto attracts 30% VDA tax on gains.
4. Non-Profitable P2P Transfers: Not taxed if no gain occurs, but 1% TDS may apply if above ₹10,000/₹50,000 thresholds. Keep records for compliance.

Example: If you earn ₹50,000 in staking rewards, it’s taxed at your slab rate (e.g., 20% = ₹10,000). If you sell the staked crypto for ₹60,000 (cost basis ₹50,000), the ₹10,000 gain is taxed.

Crypto investments in India come with clear but strict tax rules. The 30% flat rate may feel steep, but it simplifies calculations and reduces uncertainty. Use review tax calculators, stay updated with rule changes, and get professional help if you think it is getting difficult. Regularly check the Income Tax Department’s website and follow Giottus blogs for the latest updates. 

With the volatility of crypto, proper handling guarantees compliance and optimizes profit. By learning how crypto trades, futures, and gifts are taxed, you can safeguard your finances, maximise your returns, and invest confidently.

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Disclaimer:
Cryptocurrency investments are highly volatile and speculative. Past performance does not guarantee future results. Market conditions can change rapidly, and all price levels reflect data as of August 2025. Investors should conduct thorough research and assess their risk tolerance before investing. For real-time updates and live price tracking, monitor BabyDoge’s price on Giottus.