Taxes, records & staying compliant

Swapping one coin for another can be a taxable sale.

Builder · 8 min · Updated 2026-11-08

💡 Keep the receipts

If you sell a painting, the tax office wants to know what you paid for it and what you sold it for. Without the purchase receipt, you might pay tax on the whole sale price. Crypto is the same — except you might make hundreds of "sales" a year without noticing.

Common taxable events (varies by country)

• Selling crypto for fiat currency.
• Swapping one crypto for another (in many countries, including India).
• Spending crypto on goods or services.
• Receiving crypto as income, mining or staking rewards (often taxed as income when received).
• Airdrops (treatment differs).

Usually not taxable: buying crypto with fiat and holding; moving coins between your own wallets (but keep records!).

Cost basis and gains

Gain = sale proceeds − cost basis (purchase price + allowable costs). Countries differ on which costs are deductible and on lot-matching methods (FIFO, average cost, specific identification).

India example rules

Under India's Virtual Digital Asset regime: flat 30% tax (plus cess) on gains, only cost of acquisition deductible, no set-off of losses against other income or other VDA gains, and 1% TDS on transfers above thresholds. From 1 April 2026 the provisions moved into the new Income-tax Act, 2025 with the same rates.

Records to keep for every transaction

Date & time · asset & amount · value in local currency at the time · fees · counterparty/platform · wallet addresses · purpose (trade, gift, income). Export exchange statements regularly — platforms can close.

🧮 Practical example: a simple Indian VDA calculation

Key takeaways

• Swaps, sales, spending and rewards can be taxable.
• Gain = proceeds − cost basis.
• Rules vary — India: 30% + cess, 1% TDS, no loss set-off.
• Keep records for every transaction.

Education only — not financial advice.