How to Calculate Crypto Profit After Tax and TDS in India (2026)

Making a profit from crypto is only one part of the calculation. If you trade Bitcoin, Ethereum or other Virtual Digital Assets (VDAs) in India, you also need to understand 30% VDA tax, 1% TDS where applicable, cess, and how TDS credit affects your final tax payable.

The most important point is:

1% TDS is not the same as your final crypto tax.

TDS is generally a tax credit/withholding mechanism, while the special VDA tax is calculated separately. The Income Tax Department currently states that income from transfer of VDAs is taxed at 30% under Section 115BBH, along with applicable surcharge and 4% health and education cess.

Quick Example

Suppose you buy crypto for:

₹1,00,000

and later sell it for:

₹1,50,000

Your crypto profit is:

₹50,000

Tax at 30%:

₹15,000

4% cess on ₹15,000:

₹600

Total tax before any applicable surcharge:

₹15,600

Now suppose ₹1,500 TDS was deducted on the qualifying transaction.

You don’t pay ₹15,600 + ₹1,500 as final tax.

Instead, the ₹1,500 TDS can generally be considered as tax credit, subject to appearing correctly in your tax records.

So the remaining tax, in this simplified example, would be:

₹15,600 − ₹1,500 = ₹14,100

Crypto Profit vs Taxable Crypto Income

First, calculate the profit from the VDA transfer.

Basic Formula

Crypto Profit = Transfer Value − Cost of Acquisition

For example:

Particular	Amount
Purchase cost	₹2,00,000
Sale value	₹3,00,000
Crypto income	₹1,00,000
Tax @ 30%	₹30,000
4% cess	₹1,200
Tax before surcharge	₹31,200

The Income Tax Department’s Schedule VDA requires transaction-wise details, including date of acquisition, date of transfer, cost of acquisition, consideration received and income from transfer.

How 1% Crypto TDS Fits Into the Calculation

TDS is calculated separately from your final VDA income-tax calculation.

For a qualifying transaction where 1% TDS applies:

TDS = Applicable Transaction Amount × 1%

For example:

Transfer consideration = ₹3,00,000

TDS = ₹3,000

But your profit could be much smaller.

If you bought that crypto for ₹2,00,000:

Profit = ₹3,00,000 − ₹2,00,000

Profit = ₹1,00,000

So:

TDS = ₹3,000

while:

VDA profit = ₹1,00,000

These are two different calculations.

Full Example: Calculate Crypto Profit After Tax and TDS

Let’s take a complete example.

Suppose:

Purchase price = ₹5,00,000

Sale price = ₹8,00,000

Therefore:

Profit = ₹3,00,000

Step 1: Calculate VDA Tax

30% of ₹3,00,000:

₹90,000

Step 2: Calculate 4% Cess

4% of ₹90,000:

₹3,600

Step 3: Total Tax

₹93,600

This excludes any applicable surcharge.

Step 4: Calculate TDS

If 1% TDS applies to ₹8,00,000:

₹8,000

Step 5: Adjust TDS Credit

₹93,600 − ₹8,000 = ₹85,600

So, in this simplified example:

• Crypto profit: ₹3,00,000
• Tax before TDS credit: ₹93,600
• TDS already deducted: ₹8,000
• Remaining tax payable: ₹85,600

Does TDS Reduce Your Crypto Profit?

Generally, you should not treat TDS as a reduction in your acquisition cost or as an expense that automatically changes the VDA profit calculation.

Think about the calculation in two separate stages:

Stage 1 — Calculate Crypto Income

Sale/transfer value − eligible cost of acquisition

Stage 2 — Calculate Tax

VDA income × applicable tax rate + applicable cess/surcharge

Stage 3 — Adjust TDS Credit

Final tax liability − eligible TDS credit

Keeping these stages separate prevents many calculation mistakes.

Example: TDS Is Higher Than the Profit

This is where the difference becomes obvious.

Suppose:

Purchase cost = ₹1,00,000

Sale value = ₹1,05,000

Profit:

₹5,000

Assume 1% TDS applies to the relevant ₹1,05,000 consideration.

TDS:

₹1,050

Your TDS is therefore more than your ₹5,000 profit would suggest if you were incorrectly calculating TDS as a percentage of profit.

This is why:

Never calculate crypto TDS as 1% of your profit.

What If You Sell Crypto at a Loss?

Suppose:

Purchase cost = ₹2,00,000

Transfer value = ₹1,50,000

The transaction has a:

₹50,000 loss

The special VDA provisions are important here. Section 115BBH restricts the set-off and carry-forward of losses arising from VDA transfers.

The Income Tax Department’s ITR guidance also shows that Schedule VDA records nil income where a transaction results in a loss, rather than allowing that loss to reduce the reported income from another VDA transaction.

Therefore, don’t use the normal stock-market capital-loss approach for crypto without checking the specific VDA rules.

Multiple Crypto Trades: How to Calculate

Suppose you make four trades:

Crypto	Cost	Transfer Value	Profit/Loss
Bitcoin	₹1,00,000	₹1,40,000	₹40,000
Ethereum	₹80,000	₹1,00,000	₹20,000
Solana	₹60,000	₹50,000	Loss
Bitcoin	₹50,000	₹75,000	₹25,000

For profitable transactions:

₹40,000 + ₹20,000 + ₹25,000 = ₹85,000

The loss transaction doesn’t simply get deducted from this amount under the special VDA loss rules.

So you need to maintain transaction-wise records, rather than calculating tax only from your total deposits and withdrawals.

Crypto-to-Crypto Swaps

Another common mistake is ignoring crypto-to-crypto transactions.

For example:

Bitcoin → Ethereum

You may not receive Indian rupees, but a VDA transfer can still have tax implications.

The current Form 141 instructions also specifically recognize VDA transactions made in cash or in exchange for another VDA for the relevant TDS reporting framework.

So your crypto tax spreadsheet should not contain only INR deposits and withdrawals.

How to Calculate Your Total Crypto Tax

For multiple profitable transactions, a simple working process is:

Step 1: List Every Transfer

Record:

• Date
• Crypto
• Quantity
• Acquisition cost
• Transfer value
• Exchange/wallet

Step 2: Calculate Each Transaction

Transfer value − acquisition cost

Step 3: Apply the VDA Rules

Identify the income that is taxable under the applicable VDA provisions.

Step 4: Calculate 30% Tax

Taxable VDA income × 30%

Step 5: Add Cess

Tax × 4%

Step 6: Add Applicable Surcharge

If applicable based on your overall tax position.

Step 7: Subtract TDS Credit

Use eligible TDS already deducted and reflected in your tax records.

Example With Three Profitable Trades

Suppose:

Trade	Cost	Sale	Profit
BTC	₹2,00,000	₹3,00,000	₹1,00,000
ETH	₹1,50,000	₹2,00,000	₹50,000
SOL	₹1,00,000	₹1,40,000	₹40,000

Total VDA income:

₹1,90,000

Tax at 30%:

₹57,000

4% cess:

₹2,280

Total:

₹59,280

Now suppose qualifying TDS credited to you is:

₹6,400

Remaining tax:

₹59,280 − ₹6,400 = ₹52,880

Again, this is a simplified illustration and assumes the figures used are the relevant taxable amounts.

What If TDS Was Deducted on Every Trade?

Suppose your exchange records show:

Trade	Transfer Value	TDS @ 1%
BTC	₹3,00,000	₹3,000
ETH	₹2,00,000	₹2,000
SOL	₹1,40,000	₹1,400
Total	₹6,40,000	₹6,400

Your total TDS credit would be:

₹6,400

You then reconcile this with the tax information available to you before filing your return.

The Income Tax Department’s current Form 141 includes a dedicated Schedule D for TDS on payment by an Individual/HUF on transfer of VDA under Section 393(1).

TDS Is Not an Additional 1% Tax

This is worth repeating.

Suppose your calculated tax is:

₹59,280

and your TDS credit is:

₹6,400

You don’t normally calculate:

₹59,280 + ₹6,400 = ₹65,680

Instead, the TDS is generally credited against your tax liability.

Simplified:

₹59,280 − ₹6,400 = ₹52,880

What If Your TDS Is More Than Your Final Tax?

Suppose:

Final tax liability = ₹10,000

and eligible TDS credit:

₹15,000

The excess may result in a refund, subject to your complete income-tax return and applicable rules.

Therefore, TDS deducted during crypto transactions should be tracked carefully.

How to Check Your TDS

Before filing your return, compare:

Crypto exchange statement

↓

TDS information

↓

AIS/TDS records

↓

Your transaction spreadsheet

↓

Income-tax return

If the TDS shown by the exchange doesn’t match the tax information available in your records, investigate the mismatch before filing.

What About Tax on Unsold Crypto?

Suppose you bought:

₹2 lakh of Bitcoin

and its market value rises to:

₹3 lakh

but you haven’t transferred it.

The ₹1 lakh increase in market value is not automatically the same as taxable transfer income.

The VDA provisions concern income from transfer, which is why transaction records are important.

The Income Tax Department’s Schedule VDA itself asks for the date of acquisition, date of transfer, cost and consideration received.

Is the 30% Rate Applied to the Whole Sale Amount?

No.

This is another common misunderstanding.

Suppose:

Purchase cost = ₹5 lakh

Sale value = ₹7 lakh

You don’t generally calculate:

₹7 lakh × 30%

as your VDA income-tax calculation.

The relevant calculation starts with:

₹7 lakh − ₹5 lakh = ₹2 lakh

The Income Tax Department’s Schedule VDA explicitly calculates income from transfer as consideration received minus cost of acquisition.

Can You Deduct Trading Expenses?

Be careful here.

The VDA regime specifically permits the cost of acquisition, but it does not provide a broad deduction for every expense connected with crypto trading.

Therefore, don’t automatically subtract:

• Exchange fees
• Platform charges
• Internet costs
• Trading software
• Advisory expenses
• Other miscellaneous expenses

from your VDA income.

For complicated portfolios, especially where business/professional activity is involved, obtain professional tax advice rather than assuming every trading expense is deductible.

What About the New Tax Law in 2026?

For transactions and tax compliance from 1 April 2026, India’s Income Tax Act, 2025 has reorganized various provisions.

The VDA tax framework continues to reference Section 115BBH in the current ITR materials, including the 30% rate.

For VDA TDS by an Individual/HUF, the current Form 141 uses Section 393(1) and identifies VDA transfers under its Schedule D.

So when researching crypto taxation, make sure the information you’re reading corresponds to the relevant tax year.

How to Calculate Crypto Profit After Tax

You can use this simplified framework:

1. Calculate Profit

Sale Value − Cost of Acquisition = VDA Income

2. Calculate Tax

VDA Income × 30%

3. Calculate Cess

Tax × 4%

4. Add Applicable Surcharge

Where applicable.

5. Find TDS Credit

Add together eligible TDS deducted on your qualifying transactions.

6. Calculate Remaining Tax

Total Tax Liability − TDS Credit = Remaining Tax Payable

Simple Crypto Tax Formula

For a basic illustration:

Net tax payable = [(VDA income × 30%) + applicable cess + applicable surcharge] − eligible TDS credit

This is a planning formula, not a substitute for the complete tax-return computation.

Example: ₹10 Lakh Crypto Profit

Suppose your taxable VDA income is:

₹10,00,000

Tax

30%:

₹3,00,000

4% Cess

₹12,000

Total Before Surcharge

₹3,12,000

Suppose eligible TDS credit is:

₹40,000

Remaining amount:

₹2,72,000

This example excludes any applicable surcharge and assumes ₹10 lakh is the relevant taxable VDA income.

What If You Have Both Crypto Profit and Salary?

Your salary and crypto income are not simply taxed in the same way.

VDA income is subject to its special tax treatment, while your other income is calculated under the applicable provisions.

The Income Tax Department’s current ITR materials separately identify income chargeable under Section 115BBH and provide for VDA disclosure through Schedule VDA.

Therefore, don’t calculate your crypto tax by simply adding your crypto profit to your salary and applying your normal slab rate to the entire amount.

Why Keeping a Crypto Tax Spreadsheet Helps

For active traders, create columns such as:

Date	Coin	Buy Cost	Transfer Value	Profit/Loss	TDS	Exchange
10 Apr	BTC	₹1,00,000	₹1,40,000	₹40,000	₹1,400	Exchange A
20 May	ETH	₹80,000	₹1,10,000	₹30,000	₹1,100	Exchange B
15 Jun	SOL	₹60,000	₹50,000	Loss	₹500	Exchange A

The exact TDS applicability should be determined according to the transaction and applicable threshold rather than assuming every row automatically attracts 1%.

Common Mistakes

Mistake 1: Treating 1% TDS as Final Tax

TDS is a credit/withholding mechanism.

Mistake 2: Calculating 1% on Profit

TDS isn’t simply 1% of your profit.

Mistake 3: Applying 30% to the Sale Value

The VDA income calculation considers the transfer consideration and eligible cost of acquisition.

Mistake 4: Ignoring Crypto-to-Crypto Trades

A VDA-to-VDA exchange can still have tax implications.

Mistake 5: Deducting Every Trading Expense

The VDA regime has specific rules regarding deductions.

Mistake 6: Using Old Tax Information

The compliance framework changed with the Income Tax Act, 2025 for the tax year beginning 1 April 2026.

Final Verdict

Calculating your crypto profit after tax and TDS in India becomes much easier when you keep the two concepts separate.

First:

Transfer value − cost of acquisition = VDA income

Then:

VDA income × 30% = basic VDA tax

Then add:

Applicable 4% cess + applicable surcharge

Finally:

Subtract eligible TDS credit

The Income Tax Department currently confirms that VDA income is taxed at 30% under Section 115BBH, with applicable surcharge and 4% cess, and that VDA transactions are disclosed transaction-wise through Schedule VDA.

For TDS, the current Form 141 provides a specific mechanism for VDA transfers by Individual/HUF under Section 393(1) and includes both cash and VDA-for-VDA transactions.

The key takeaway: don’t subtract TDS from your crypto sale value to calculate your profit, and don’t add TDS to your final tax as an extra tax. Calculate the VDA income first, calculate the applicable tax, and then use the eligible TDS as a tax credit.

For high-volume trading, multiple exchanges, P2P transactions, self-custody wallets, staking, mining or complex crypto-to-crypto swaps, a qualified tax professional should review the transaction records before filing.