Indian Budget 2025-26: What's New for Cryptocurrency?

WikiFX

| 2025-02-03 19:45

Abstract： On February 1st, 2025 Nirmala Sitharaman, Finance Minister of India presented the Union Budget for 2025-2026 in Parliament. This budget introduces several significant changes, with the government asserting that it addresses the needs of the common people.

On February 1st, 2025 Nirmala Sitharaman, Finance Minister of India presented the Union Budget for 2025-2026 in Parliament. This budget introduces several significant changes, with the government asserting that it addresses the needs of the common people. Among the key features are new schemes and policy measures designed to benefit the public, reflecting the governments continued focus on economic growth and welfare.

No major changes

The Budget for 2025 has introduced no changes to the taxation framework for cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH). Consequently, the provisions outlined in the Finance Act of 2022 will remain in effect for the taxation of virtual digital assets (VDAs) in the financial year 2025-26.

The 2025 Budget plans broaden the definition of Virtual Digital Assets (VDAs) to include any crypto-asset that reflects value digitally and depends on cryptographically secure distributed ledger technology, or comparable technologies, to verify and safeguard transactions. The purchase price is the only amount that can be deducted from the selling of cryptocurrency. However, when calculating taxable cryptocurrency income, transaction fees and other related fees cannot be deducted.

Reporting VDA Income in Tax Returns

Those engaged in cryptocurrency trading are required to report their VDA income in Schedule VDA of the relevant annual income tax return. VDA income can only be reported using ITR-2 or ITR-3, as ITR-1 does not include the VDA schedule. This schedule requires information such as the acquisition date, transfer date, acquisition cost, and the amount received from the transaction.

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