The Mandatory Schedule VDA
If you bought, sold, or swapped cryptocurrency during the financial year, you cannot use the simple ITR-1 form. You must file ITR-2 or ITR-3 and fill out a specific section called Schedule VDA (Virtual Digital Assets).
Here is how to report your crypto trades correctly to avoid notices.
Quick stat: Schedule VDA applies the flat 30% tax on each profitable trade and ignores losses; the 1% TDS already deducted (Section 194S) is claimed back as credit (Source: Sections 115BBH and 194S, Income Tax Act).
Step 1: Gather Your Data
You cannot just enter a single "Net Profit" number. The tax portal requires transaction-level or aggregated details. You need a tax report from your crypto exchange that includes: - Date of Acquisition (Purchase) - Date of Transfer (Sale) - Head under which income is to be taxed (Usually Capital Gains or Business Income) - Cost of Acquisition - Consideration Received (Sale Value)
Step 2: Fill Schedule VDA
In the ITR utility on incometax.gov.in, navigate to Schedule VDA. You must add rows for your transactions.
The Golden Rule: You must report profitable trades and loss-making trades separately. Because losses cannot be set off against gains, the portal's calculator will sum up the profits from your winning rows and apply the 30% tax, while ignoring the losses from your losing rows.
Step 3: Claim Your TDS
Indian exchanges deduct 1% TDS on your sales under Section 194S. 1. Check your Form 26AS or AIS to verify the total TDS deposited by the exchange. 2. Ensure this amount is reflected in the TDS Schedule of your ITR. 3. This TDS acts as advance tax paid. It will be subtracted from your final 30% tax liability.
What about Foreign Exchanges?
If you trade on Binance, KuCoin, or decentralized wallets (MetaMask), no TDS is deducted. However, you are still legally required to calculate your profits, convert the USD values to INR, and report them in Schedule VDA.
Furthermore, if you hold crypto in a foreign exchange, you must also declare those holdings in Schedule FA (Foreign Assets).
Check your AIS The most common mistake crypto traders make is forgetting that Indian exchanges report every single sale to the government. If your AIS shows ₹5 Lakh in crypto sales (due to the 1% TDS), and you report nothing in Schedule VDA, you will receive a defective return notice. LastMinute ITR helps you cross-check your AIS to ensure you don't miss these mandatory disclosures before you file.
Start with LastMinute ITR · import your exchange report · fix an AIS mismatch.
What you should do
- Pull a transaction-level tax report from your exchange (CoinDCX, WazirX, ZebPay).
- Enter profitable and loss-making trades on separate rows in Schedule VDA.
- Match your 1% TDS in Form 26AS / AIS and claim it in the TDS schedule.
Common mistake
Netting all trades into one figure. Losses cannot offset gains in crypto, so a single netted row hides taxable profit. List trades separately so the portal taxes gross profits correctly.