Filing ITR 2025? Here's How to Report Your Cryptocurrency Gains Under New Tax Rules

With the income tax filing deadline of September 15, 2025, approaching, crypto investors and traders in India need to pay special attention to how they report their earnings. The Income Tax Department has tightened rules around cryptocurrency taxation, and failure to disclose gains correctly could result in heavy penalties. Here's how to report crypto gains in ITR for FY 2024-25 (AY 2025-26).

How Crypto is Taxed in India

Cryptocurrencies and other Virtual Digital Assets (VDAs) are taxed under Section 115BBH of the Income Tax Act at a flat rate of 30%, plus surcharge and a 4% health and education cess, as per data from the income tax portal.

Major points to note are as follows:

• No distinction between short-term and long-term capital gains.
• The flat 30% tax applies whether you trade crypto as an investment or as a business.
• Only the cost of acquisition can be deducted.

TDS Rules on Crypto Transactions

Since July 1, 2022, a 1% TDS is applicable on transfers of crypto assets. This applies if the annual value of transactions exceeds Rs. 50,000 (Rs. 10,000 for certain categories). The TDS helps the government track crypto transactions and ensure compliance.

Which ITR Form to Use for Crypto Gains

For AY 2025-26, the Income Tax Department has introduced a dedicated section called Schedule VDA to report crypto transactions.

• ITR-2: To be used by individuals reporting crypto as investment income.
• ITR-3: To be used if crypto trading is treated as a business activity.

When you file your ITR, you'll need to fill out Schedule VDA if you've traded in crypto. This section asks for details like the type of cryptocurrency you bought or sold, the dates of purchase and sale, how much you paid, how much you earned, and finally, the profit or loss you made.

If you don't report your crypto income or ignore the TDS rules, it can lead to serious trouble. The tax department may treat such earnings as undisclosed income, which attracts a much higher tax rate. On top of that, you could also face interest charges and penalties for not following the rules.

Tax experts strongly recommend keeping proper records of all your crypto transactions, whether it's buying, selling, or exchanging. Note down the dates, amounts, and even the platforms you used, especially where TDS was deducted. Having these details will make filing your ITR much easier and help avoid mistakes if your returns ever come under scrutiny.

The September 15 ITR Filing deadline is coming up. So crypto investors should make sure to report all their gains well in time.