Computation and return
Reconstruct trade history across exchanges and wallets, compute gains per asset on FIFO, reconcile TDS in Form 26AS and AIS, and file Schedule VDA and Schedule FA in ITR-2 or ITR-3.
Crypto and Digital Asset Taxation
Compliance and structuring for crypto investors, traders, NRIs and Web3 businesses — the Indian rules applied correctly, the reporting that is now automatic, and the UAE options for founders and funds, with the Indian side handled in the same engagement.
Why crypto needs its own tax advice
India taxes virtual digital assets under a regime of its own: a flat 30% on gains with no deductions other than cost, no set-off of losses against anything, and 1% tax deducted at source on every transfer. The rules are simple to state and easy to get wrong — on crypto-to-crypto trades, on foreign exchanges, on airdrops and staking, and on the reporting schedules that the department now matches against exchange data.
From April 2026 exchanges and other service providers report crypto transactions to the tax department, and from April 2027 India joins the OECD's Crypto-Asset Reporting Framework, under which foreign exchanges report Indian residents' accounts automatically. The era of undeclared wallets is closing; the work now is to get the position right and file it.
We advise individuals and businesses on the Indian regime, and — because a large part of our practice is in the Gulf — on the UAE frameworks under VARA, ADGM and DMCC for founders, funds and service providers who are moving or expanding there, together with the Indian residency, POEM and disclosure consequences of doing so.
We advise on tax, accounting and structuring. We do not provide investment advice, recommend any asset or platform, or act as a licensed representative before a virtual-asset regulator.
Who we work with
- Investors and traders on Indian and foreign exchanges — returns, TDS reconciliation and notices
- NRIs in the UAE with crypto bought while resident in India, or holdings on Indian exchanges
- Web3 founders, developers and DAO contributors paid in tokens
- Exchanges, brokers, OTC desks and wallet businesses — FIU-IND, TDS and GST compliance
- Funds and family offices holding digital assets through UAE or offshore structures
- Businesses accepting crypto payments or holding tokens on the balance sheet
India
The Indian regime, applied correctly
The rules under section 194 (115BBH of the 1961 Act) and section 393 (194S of the 1961 Act), carried into the Income-tax Act, 2025 without change, as they apply for FY 2026-27.
| Item | Position |
|---|---|
| Tax on gains from transfer of a virtual digital asset | 30% plus surcharge and 4% cess, whatever the holding period and whatever your slab |
| Deductions | Only the cost of acquisition. No expenses, no exchange fees, no network (gas) fees paid on the blockchain, no depreciation, no Chapter VI-A deductions against VDA income |
| Losses | Cannot be set off against any other income — including gains on other crypto assets — and cannot be carried forward |
| TDS on transfer (section 393; 194S) | 1% of the consideration, deducted by the exchange or by the buyer; threshold ₹50,000 a year for an individual or HUF who has no business or professional income, or whose business turnover was up to ₹1 crore or professional receipts up to ₹50 lakh in the previous year (a 'specified person'); ₹10,000 a year for everyone else. Applies to crypto-to-crypto swaps, where tax is settled in cash or in kind |
| Airdrops, staking rewards, mining, tokens received for services | Taxed on receipt at fair market value as income from other sources or business income, and again at 30% on any gain when later sold |
| Gifts of crypto | Taxable in the recipient's hands under section 92 (56(2)(x) of the 1961 Act) above ₹50,000 unless from a relative |
| NFTs | Within the VDA definition unless specifically excluded by notification |
| Reporting | Every transaction in Schedule VDA of ITR-2 or ITR-3; foreign exchange accounts and wallets held by residents in Schedule FA |
| Undisclosed crypto found in a search | Treated as undisclosed income under the 2025 amendments, with the penal rate and penalties that follow |
| Exchange and service-provider reporting | From 1 April 2026, reporting entities furnish crypto-asset transaction information to the department; from 1 April 2027 India exchanges account information with other countries under CARF |
The three mistakes we correct most often
Netting losses against gains across coins; treating trades on foreign exchanges as outside Indian tax because no TDS was deducted; and leaving foreign exchange accounts out of Schedule FA — a ₹10 lakh penalty under the Black Money Act for each year, regardless of the balance.
What we do for individuals and traders
Foreign exchange holdings
Determine the Indian tax position on Binance, Bybit, Kraken and similar accounts, the FIU-IND status of the platform, and the disclosure that applies to a resident user.
Notices and e-campaigns
Respond to AIS mismatches, section 281 (148A of the 1961 Act) show-cause notices and scrutiny built on exchange data — with a complete, documented computation rather than an explanation.
NRIs and relocation
Residential status for the year of the move, what happens to assets bought in India and sold after leaving, Indian exchange accounts held by NRIs, and the reverse position for returning residents.
Tokens as remuneration
Founders, developers and contributors paid in tokens: valuation on receipt, vesting, TDS obligations of the paying entity and the later sale.
Business and professional traders
Whether trading income can be business income, books and audit thresholds, advance tax on volatile gains and GST on crypto-related services.
Crypto businesses in India
Exchanges, brokers, OTC desks, wallet providers, payment businesses and Web3 companies.
FIU-IND registration and AML
Registration as a reporting entity under the PMLA, a KYC and transaction-monitoring framework, principal officer appointment, suspicious transaction reporting and the annual review — the requirement that offshore exchanges serving Indians now also meet.
TDS as a deductor
Section 393 (194S) deduction on every transfer through the platform, including in-kind settlement for crypto-to-crypto trades, quarterly Form 26Q or 26QF, and TDS certificates to users.
GST
18% on exchange, brokerage and platform fees, place-of-supply rules for foreign users, reverse charge on overseas services, and the position on tokens themselves.
Accounting for tokens
Recognition, measurement and impairment of tokens held as inventory, intangibles or treasury under Indian accounting standards; audit-ready records from on-chain data.
Corporate income tax
Whether a platform's or fund's token gains fall under the 30% VDA regime or business income, treasury holdings, and the interaction with the loss rules.
Transaction reporting from April 2026
Building the reporting-entity process for crypto-asset transaction statements to the department, ahead of CARF exchange from 2027.
United Arab Emirates and offshore
Structuring in the UAE — with the Indian exit handled
Dubai and Abu Dhabi have licensed frameworks for virtual-asset businesses, no personal income tax and a corporate tax regime that treats crypto businesses as ordinary taxable companies. The opportunity is real; so is the Indian side that most providers ignore.
VARA — Dubai
The Virtual Assets Regulatory Authority licenses exchange, broker-dealer, custody, advisory, lending, management, transfer and settlement services across Dubai (outside DIFC). Two-stage licensing, minimum capital by activity, a compliance function and a local presence; typically six to twelve months to full licence.
ADGM and DIFC
Abu Dhabi Global Market's FSRA framework for exchanges, custodians and funds, and the DFSA regime in DIFC, for larger and institutional businesses that want a common-law regulator recognised by international banks and investors.
DMCC Crypto Centre
The practical home for Web3 start-ups, proprietary trading, development studios and advisory businesses that do not need a VARA licence for their activity — a free zone company with a crypto-related licence activity, visas and bank introductions.
| Question | What we settle before the licence |
|---|---|
| UAE tax | A UAE crypto company pays corporate tax at 9% on profits above AED 375,000 — trading and service income is not qualifying free zone income. Transfers and conversions of virtual assets are exempt from VAT; fees for services are not. Individuals pay no personal tax on their own gains. |
| Indian residence of the founder | The 182-day and 120-day tests, the deemed-residency rule for Indian citizens with Indian income above ₹15 lakh, and the year of the move — when gains on assets bought in India and sold after relocation are still taxable in India. |
| Place of effective management | A Dubai company whose decisions are taken from India is an Indian resident. A real UAE team, board and bank mandate are part of the structure, not an afterthought. |
| Funding and reporting | ODI under the Overseas Investment Rules for the Indian shareholder's investment, the APR every December, and Schedule FA for every resident family member with an interest. |
| Moving existing holdings | Transferring tokens from a resident's wallet to a UAE entity is a transfer for Indian tax — taxed at 30% at that point — and may need exchange-control analysis; it is planned, not assumed. |
| Serving Indian customers from the UAE | A UAE platform with Indian users must register with FIU-IND and deduct Indian TDS; the UAE licence does not remove Indian obligations. |
How we work with UAE licensing
We prepare the business plan, financial projections and tax and structuring analysis, incorporate the entity and coordinate with licensed UAE compliance and legal advisers for the regulatory application. We handle the Indian ODI, POEM and disclosure work directly. Read about our UAE setup service.
Frequently asked questions
Can I set off a loss on one coin against a gain on another?
No. Section 194 (115BBH) prohibits set-off of any loss from a virtual digital asset against any income, including gains on other virtual digital assets, and losses cannot be carried forward. Each transfer with a gain is taxed at 30%.
I trade only on a foreign exchange where no TDS is deducted. Is it taxable in India?
Yes, if you are resident in India. Tax follows residence, not the platform. Gains are taxable at 30%, the account must be reported in Schedule FA, and from 2027 the exchange will report the account to India under CARF. Many offshore exchanges have also registered with FIU-IND and now deduct TDS for Indian users.
Are airdrops and staking rewards taxed?
Generally, yes — as income at their fair market value when received, and then at 30% on any further gain when sold. The valuation date and method should be documented at the time of receipt.
If I move to Dubai, is my crypto tax-free?
Gains realised while you are a non-resident of India are outside Indian tax, and the UAE has no personal income tax. But the year of the move is tested on days of stay, assets bought in India and sold in that year may still be taxable, and a UAE company run from India remains taxable in India. The move has to be real and planned.
Does a UAE VARA licence let me serve Indian customers?
It permits the activity in Dubai. Serving Indian residents brings Indian obligations regardless: FIU-IND registration as a reporting entity, TDS under section 393 (194S) and, from 2026, transaction reporting to the Indian tax department.
What records do I need to keep?
Complete trade histories and wallet exports from every exchange and wallet, valuations for receipts in kind, TDS certificates, bank statements showing fiat on- and off-ramps, and, for businesses, audit-ready reconciliations of on-chain balances to the books.
Get your crypto position right before the data does it for you
Send us your exchange statements and we will tell you where you stand — for the return, for a notice, or for a move to the UAE.