Key Takeaways
- Crypto profits in India are taxed at 30%, plus 4% cess.
- 1% TDS applies on every sale or trade, even if you’re not in profit.
- From July 7, 2025, platforms like Bybit began charging 18% GST on trading and withdrawal fees.
- To avoid penalties, always report trades in Schedule VDA, track TDS, and use tax-compliant exchanges.
Cryptocurrency is booming again, but Indian traders know better than to count their profits before tax. In 2025, India’s crypto taxation rules remain some of the strictest in the world.
Whether you’re swapping Bitcoin or staking altcoins, you lose a significant portion of your earnings to taxes and transaction costs.
So, how much do you actually keep from your crypto profits in India in 2025? Let’s break it down.
What India’s New 18% GST Rule Means for Crypto Platform Users
On July 7, 2025, leading global exchange Bybit officially rolled out 18% GST on all crypto-related services for Indian users.
This follows government clarification that crypto exchanges, platforms, and apps operating in India or serving Indian users must:
- Collect 18% Goods & Services Tax (GST) on trading fees, swaps, staking, withdrawals, deposits, and other platform charges.
- Register under Indian GST law and report user activity to the authorities.
This does not affect your trading profits directly, but it adds a cost layer on platform usage, and that’s why it matters.
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18% GST covers not only spot and futures trading, but also tools like copy trading, and automated strategies such as grid bots, DCA bots, and futures bots.
Beyond trading, it also extends to:
- Yield farming and earning products
- Staking rewards
- Withdrawals
- Token conversions or swaps
- Fiat deposits through bank transfers or cards
- Card-based payments
This sweeping application of GST means that nearly every service offered by crypto platforms to Indian users now carries an added tax cost.
And it doesn’t end there.
In response to this regulatory tightening, Bybit is scaling back its offerings in India. The platform will:
- Disable crypto loans starting July 9
- Shut down Bybit Card and trading bots by July 17
Together, these moves represent a significant retreat from the Indian crypto market.
Crypto Tax Rules in India (2025): Full Breakdown
Here are the four major tax components you need to understand if you’re trading or investing in crypto in India:
| Component | Rate | Applies To |
| Income Tax (Sec 115BBH) | 30% | Flat tax on crypto profits |
| Cess | 4% on tax | Adds 1.2% on top of 30% = Effective 31.2% |
| TDS (Tax Deducted at Source) | 1% | On total sale value, not just profits |
| GST (Post July 7, 2025) | 18% | On exchange/platform fees |
Example: What You Actually Keep After Crypto Taxes in India
Let’s say you bought Ether (ETH) for ₹2 lakh and sold it for ₹3 lakh. That’s a ₹1 lakh gain. Here’s how taxes and charges stack up:
| Item | Amount |
| Gross profit | ₹1,00,000 |
| Income tax @30% | ₹30,000 |
| Cess @4% on ₹30,000 | ₹1,200 |
| Total tax payable (31.2%) | ₹31,200 |
| TDS @1% on sale (₹3,00,000) | ₹3,000 |
| Exchange fee (say 1%) | ₹3,000 |
| GST @18% on fee | ₹540 |
| Final profit in hand | ₹1,00,000 – ₹31,200 – ₹3,000 – ₹540 = ₹65,260 |
So, you keep just 68.26% of your actual crypto gain.
Please note that when you sell crypto, the exchange deducts 1% TDS on the total sale amount—for example, ₹3,000 on a ₹3 lakh sale. This means you actually receive ₹2,97,000 in your wallet (before fees). That ₹3,000 is sent directly to the Income Tax Department on your behalf.
In tax reporting:
- You don’t deduct TDS from your profit, it’s pre-paid tax, claimable later. So even though the ₹3,000 is withheld, it’s already included in your ₹31,200 tax liability, it’s not in addition to it.
- Since ₹3,000 has already been deducted as TDS, you only need to pay the remaining ₹28,200 when filing your income tax return.
- You do deduct the exchange fee + GST when calculating your net cash realized.
So in the earlier example, your true post-tax cash in hand is ₹68,260, but your declared profit is still ₹1,00,000, with ₹31,200 tax liability (TDS offsets some of that).
Why Exchange Fee & GST Don’t Reduce Taxable Profit
- The ₹3,000 exchange fee and the ₹540 GST are real expenses you pay, but they do not reduce your declared crypto gain.
- Your taxable gain remains ₹1,00,000, so the tax liability stays ₹31,200, regardless of what the exchange charged you.
Even if you only receive ₹65,260 in-hand after all charges, the government taxes you based on the ₹1,00,000 profit, not what you actually walked away with.
Declare Crypto in Your ITR – Or Risk a 60% Penalty
The Income Tax Department in 2025 is cracking down harder than ever:
- Not declaring your crypto under Schedule VDA can trigger notices, penalties, and search/seizure.
- From February 1, 2025, undeclared crypto gains discovered during investigation can attract punitive 60% tax , plus interest and prosecution.
If you use exchanges like Bybit, Binance, or OKX, and you’re in India, remember that your transactions are being reported to tax authorities.
Tips to Maximize What You Keep
With centralized exchanges like Bybit, Binance, and OKX now reporting user data to Indian tax authorities, avoiding crypto tax compliance is no longer an option. To legally hold on to more of your profits, it’s essential to optimize how you trade, file, and track your transactions.
Here are practical tips to help you minimize friction and maximize what you keep:
- File accurately: Always report all crypto holdings and trades in Schedule VDA while filing returns. Avoid last-minute panic.
- Track TDS & file timely: Track TDS through Form 26AS or exchange statements. Don’t miss claiming what you’ve already paid.
- Limit over-trading: Frequent trades trigger repeated TDS, fees, and GST. Batch trades strategically to reduce tax friction.
- Use crypto tax software: Tools like KoinX, CoinTracker, and Cleartax Crypto simplify ITR filings and track portfolio gains with tax compliance.
- Explore crypto ETFs: Some Indian investors are shifting to Bitcoin and Ethereum ETFs for better tax treatment under capital gains provisions. These are subject to long-term tax benefits and allow loss set-offs, unlike direct crypto trades.
Common Mistakes Crypto Traders Must Avoid
If you a crypto trader in India, avoid these mistakes:
- Not declaring crypto income in Schedule VDA during tax filing.
- Ignoring TDS deduction tracking, which may cause issues during returns.
- Not accounting for GST when calculating total transaction costs.
- Assuming losses can be set off, they can’t.
Conclusion
Crypto profits are real, but so is the taxman. By July 2025, Indian crypto taxation has become more structured, traceable and unforgiving. Between 31.2% in taxes, 1% TDS, and 18% GST on services, traders typically retain only 66–68% of their gross profits.
If you’re in the game, stay compliant, track everything, and plan better. Crypto is still profitable, but only if you trade smart and file smarter.
FAQs
Does GST apply to crypto profits directly?
No. 18% GST applies only to the services provided by crypto exchanges, such as trading fees, withdrawals, staking, and swaps, not to your crypto profits directly. But it still adds to your cost of trading.
Can I offset crypto losses against other gains or income?
No. Under Section 115BBH, crypto losses cannot be set off against gains from other cryptocurrencies, assets, or any other income. Losses also cannot be carried forward.
What happens if I don’t report my crypto trades in my tax return?
Failing to disclose crypto holdings in your Income Tax Return (Schedule VDA) can result in notices, penalties, and even raids. As of February 2025, undeclared gains found via investigation can be taxed at a punitive rate of 60%, plus fines.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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