Crypto Tax & TDS Calculator
Calculate Your Crypto Tax Obligations
This calculator helps you determine your tax liabilities based on India's current crypto regulations (1% TDS + 30% tax on gains).
Can a business in India legally accept Bitcoin, Ethereum, or any other cryptocurrency as payment for goods or services? The short answer is no-not as a payment method. But here’s what most people miss: you can legally trade, hold, and offer crypto-related services-if you follow strict rules.
What’s Actually Allowed?
India doesn’t ban cryptocurrency. You can buy it. Sell it. Hold it. Even run a crypto exchange. But accepting crypto as payment for your products or services? That’s a hard no. The government treats crypto as a Virtual Digital Asset (VDA), not money. That means it’s not legal tender. You can’t use it to pay your electricity bill, your supplier, or your customers. The Reserve Bank of India (RBI) has been clear: only the Indian rupee is valid for transactions. So what can you do legally? You can operate a crypto exchange, offer investment advice, build blockchain tools, or run a crypto education platform. But if you’re a restaurant, a retailer, or a service provider trying to let customers pay with Bitcoin? You’re breaking the rules-even if the transaction is technically possible.The Tax Trap: 30% Flat Tax + 1% TDS
Even if you’re not accepting crypto as payment, if you’re trading it, the tax man is watching. Since 2022, every gain from crypto sales is taxed at a flat 30%. No deductions. No offsetting losses. Even if you lost money on one trade and made money on another, you still pay 30% on the profit. Then there’s the 1% Tax Deducted at Source (TDS). Every time crypto moves-from exchange to wallet, from one person to another-the platform must withhold 1% and send it to the government. That includes businesses. If you sell Ethereum to a customer for INR 100,000, you have to collect INR 1,000 as TDS and remit it. That’s cash flow you didn’t expect. Many small businesses get caught off guard by this. And you must report every transaction. The Income Tax Department now has direct access to exchange data. If you didn’t report a sale, they’ll find it. Penalties can be up to 200% of the tax evaded.Compliance Isn’t Optional: FIU-IND Registration
If your business touches crypto in any way-buying, selling, storing, or facilitating transfers-you must register with the Financial Intelligence Unit of India (FIU-IND). This isn’t a suggestion. It’s law under the Prevention of Money Laundering Act (PMLA). To register, you need:- Full KYC on every user (ID, address, phone, bank details)
- Transaction monitoring systems that flag suspicious activity
- Record keeping for 5 years
- Regular reporting to FIU-IND
The Travel Rule: India’s Strictest in the World
India enforces the FATF Travel Rule with zero tolerance. That means for every crypto transfer-no matter how small-you must collect and store:- Sender’s full name, address, and ID number
- Receiver’s full name, address, and ID number
- Exact amount and timestamp
- Reason for transfer
What’s Coming? The COINS Act 2025
A new law, the Comprehensive Regulation of Cryptographic Assets (COINS) Act, is under review. If passed, it could change everything. The draft proposes:- Formal recognition of crypto as an asset class
- Licensing for exchanges under RBI supervision
- Clearer TDS rules-possibly allowing deductions for trading fees
- Consumer protection against scams
- Legal pathways for crypto payments-possibly in the future
Real-World Consequences
A Delhi-based e-commerce startup tried accepting USDT in 2024. They thought it was fine because no one had shut them down yet. Within six months:- Their bank account was frozen for ‘suspicious activity’
- The Income Tax Department issued a notice for unreported crypto income
- They were fined ₹4.2 lakh for failing to deduct TDS
- They had to shut down crypto payments and pay ₹18 lakh in back taxes and penalties
What Should You Do?
If you’re a business owner thinking about crypto:- Don’t accept crypto as payment. It’s illegal and risky.
- If you trade crypto, register with FIU-IND immediately.
- Use compliant platforms. Only use exchanges that are FIU-IND registered.
- Track every transaction. Use accounting software that auto-reports crypto gains and TDS.
- Consult a tax advisor. Crypto tax rules are complex. Don’t guess.
Why the Government Keeps It This Way
The RBI wants its own digital currency-the Digital Rupee. They see private crypto as competition. The Finance Ministry wants tax revenue. The FIU-IND wants to stop money laundering. The result? A system that lets crypto exist-but only under heavy control. There’s no political will to ban it outright. But there’s also no will to make it easy. The message is clear: you can play, but you don’t get to set the rules.Bottom Line
Businesses in India can’t accept crypto as payment. Period. But they can legally trade it, invest in it, or build crypto tools-if they jump through all the hoops. The tax burden is high. The compliance is demanding. The penalties are severe. But it’s not illegal to be in the crypto space. It’s illegal to ignore the rules. If you want to participate, do it right. Register. Report. Pay your taxes. Stay compliant. Because the next crackdown won’t wait for you to catch up.Can I accept Bitcoin as payment for my services in India?
No. Cryptocurrency is not legal tender in India. Businesses cannot legally accept Bitcoin, Ethereum, or any other crypto as payment for goods or services. Doing so violates the government’s stance that only the Indian rupee is valid for transactions. While you can trade or hold crypto, using it to pay customers or receive payments from them is prohibited.
What happens if I accept crypto and don’t report it?
You risk severe penalties. The Income Tax Department can track all crypto transactions through exchanges and wallet providers. If you fail to report crypto income, you’ll face a 30% tax on gains plus 4% cess. You may also be charged up to 200% of the evaded tax as a penalty. Additionally, if you didn’t deduct 1% TDS, you could be fined or face criminal proceedings under the PMLA. Many businesses have had bank accounts frozen or been blacklisted for non-compliance.
Do I need to register with FIU-IND if I trade crypto?
Yes. If your business buys, sells, stores, or facilitates any crypto transaction-even once-you must register with FIU-IND under the Prevention of Money Laundering Act. This includes Indian and international exchanges serving Indian users. Failure to register can lead to fines, service bans, or criminal charges. Major exchanges like Binance and Bybit were fined over ₹25 crore combined before registering.
Is there a tax on crypto transfers between wallets?
Yes. A 1% Tax Deducted at Source (TDS) applies to every crypto transfer, regardless of value or purpose. Whether you’re sending crypto to a friend, moving it to a cold wallet, or paying a freelancer, the platform processing the transaction must withhold 1%. This applies to businesses too. If you send ₹1 lakh worth of ETH, ₹1,000 is automatically taken as TDS and sent to the government. You can’t avoid it.
Will the COINS Act 2025 let me accept crypto payments?
Possibly-but not yet. The COINS Act 2025 is still under consideration and has not been passed. While it may introduce clearer rules for crypto exchanges and consumer protection, there’s no guarantee it will allow businesses to accept crypto as payment. Even if it does, it will likely require licensing, strict compliance, and government oversight. Don’t assume it’s coming soon. Operate under current rules until the law changes.
Can I use crypto to pay my employees in India?
No. Salaries and wages must be paid in Indian rupees under the Payment of Wages Act, 1936. Paying employees in crypto is illegal and could lead to labor law violations, tax evasion charges, and penalties from both the Income Tax Department and labor authorities. Even if the employee agrees, the law doesn’t allow it.
What businesses can legally operate with crypto in India?
You can legally run crypto exchanges, trading platforms, blockchain development firms, crypto investment advisory services, and educational platforms-all if registered with FIU-IND and compliant with tax rules. You can also mine crypto or hold it as an investment. But you cannot use it to transact for goods or services unless the law changes. The key is staying within the boundaries of asset trading, not payment processing.
Do banks in India support crypto businesses?
Most still don’t. Even though crypto is legal to trade, many banks remain cautious and refuse to open accounts for crypto-related businesses. Some fintech banks and niche financial institutions now serve compliant FIU-IND-registered entities, but access is limited. If you’re a crypto business, expect to struggle with banking. Keep detailed compliance records to prove legitimacy when applying.
