VDA gains are taxed at a flat 30% regardless of your slab, only the cost of acquisition is deductible, and — the part that catches people — a loss on one coin cannot be set off against a gain on another.
Section 115BBH is the harshest charging section in the Act. Three rules explain almost every surprise.
This is the single most misunderstood rule in Indian crypto taxation. Section 115BBH(2) says that no set-off of loss from transfer of a virtual digital asset is allowed against income computed under any provision of the Act — and that includes income from another VDA. Make ₹3 lakh on one coin and lose ₹1.2 lakh on another in the same year, and you are taxed on the full ₹3 lakh. The ₹1.2 lakh simply disappears. It cannot even be carried forward.
Exchange fees, gas charges, transfer costs, portfolio software, the electricity for mining — none of it reduces the taxable amount. The section allows a deduction for the cost of acquisition and nothing else. Mined coins therefore have a cost of acquisition of nil in most readings, which makes the entire sale value taxable.
Section 194S deducts 1% on the transfer value, not on the gain. It appears in your AIS and is adjusted against your final liability — it is not a settlement. On a high-churn portfolio the 1% on turnover can be larger than 30% of a thin profit, which is how traders end up with a refund due and a filing obligation they did not expect.
Section 115BBH is a special rate provision. It applies identically under the old and the new regime, so the regime choice changes nothing about your crypto tax — only what happens to the rest of your income.
The calculator does the arithmetic. TaxSphere — our free case-law library, 1,184 authorities and the Act in full — has the judgments, the circulars and the statutory text for the same provision.
