Tax Filing Checklist for Indian Crypto Investors in 2025

As cryptocurrency continues to gain mainstream acceptance in India, more investors are diving into digital assets like Bitcoin, Ethereum, and altcoins. While the growth of crypto investment opportunities is exciting, it also comes with a unique set of tax obligations. Filing taxes on your crypto holdings is now a legal requirement in India, and failure to comply can result in fines or penalties.

With the financial year closing, Indian crypto investors must prepare thoroughly to meet the Income Tax Department’s compliance standards. This blog provides a comprehensive tax filing checklist specifically designed for crypto investors in 2025 to ensure a hassle-free filing experience.

Why Crypto Tax Filing Is Essential in 2025

In recent years, the Indian government has taken significant steps toward regulating the cryptocurrency sector. The Union Budget introduced a flat 30% tax on gains from crypto assets, alongside a 1% TDS (Tax Deducted at Source) on transactions above a certain threshold.

This tax structure makes it clear that crypto is now under strict scrutiny. Whether you're a long-term investor, a day trader, or someone who dabbles in NFTs or DeFi platforms, failing to report your crypto activity can attract serious legal consequences.

Who Needs to File Crypto Taxes?

If you've done any of the following activities in the 2024-25 financial year, you need to disclose them in your income tax return (ITR):

• Bought or sold cryptocurrency

• Swapped one coin for another (e.g., BTC to ETH)

• Earned crypto through staking, mining, or airdrops

• Received crypto as payment for goods or services

• Traded NFTs or participated in yield farming

The Complete Tax Filing Checklist for Crypto Investors

To stay compliant with Indian tax laws, follow this step-by-step checklist:

1. Identify the Type of Crypto Transactions

Your tax liability depends on how you interact with crypto. The government categorizes transactions as:

• Capital Gains: For long-term or short-term investments in crypto assets

• Business Income: For frequent traders or those earning crypto as a profession

• Other Income: For rewards from staking or airdrops

Understanding the classification helps you choose the correct ITR form.

2. Collect All Trading Records

Ensure that you collect detailed records of all your transactions for the year, including:

• Dates of buying and selling

• Quantity of coins/tokens

• Purchase and sale price (in INR)

• Trading platform or wallet used

• Fees paid

Most centralized exchanges offer downloadable transaction history reports. If you’ve used decentralized platforms, keep screenshots or exported CSV files for record-keeping.

3. Calculate Gains or Losses

Compute your short-term and long-term capital gains accurately. Here’s how:

• Short-term capital gains (STCG): If held for less than 36 months

• Long-term capital gains (LTCG): If held for more than 36 months (though crypto is mostly taxed under STCG in India)

Use FIFO (First-In-First-Out) method unless instructed otherwise. Deduct purchase cost and trading fees from the sale price to determine your net gain.

4. Include Airdrops, Staking, and Mining

Income from crypto mining, staking rewards, and airdrops is taxable under the "Income from Other Sources" category.

Keep a record of:

• Coin/token name

• Date received

• Value in INR at the time of receipt

Even if you haven’t sold these assets, their value must be declared at the time of acquisition.

5. Track International Exchanges and Wallets

Many Indian investors use foreign exchanges or DeFi platforms. If you’ve stored crypto in wallets like MetaMask, Ledger, or on platforms like Binance, Coinbase, or Uniswap, declare them under Schedule FA (Foreign Assets) in your ITR.

Don’t ignore this section—it’s essential to remain transparent and avoid notices from the tax department.

6. Report Losses, But Wisely

You can’t offset losses from crypto against other types of income (like salary or real estate gains), but you can offset crypto losses against crypto gains.

For example, if you earned ₹2 lakh profit on Bitcoin but lost ₹50,000 on a Dogecoin trade, report both to reduce your tax liability.

Losses can also be carried forward for up to 8 years. Make sure to report them correctly in your return to claim this benefit.

7. Pay the 1% TDS on Time

Starting FY 2022-23, all crypto transactions above ₹10,000 attract a 1% TDS. This amount is usually deducted by the exchange, but if you’re using peer-to-peer or decentralized platforms, you must deposit the TDS manually.

Track TDS payments and collect Form 26AS to ensure correct credit is reflected in your tax account.

8. Reconcile with Form 26AS and AIS

Before finalizing your return, cross-verify your crypto transactions with:

• Form 26AS: For TDS details

• AIS (Annual Information Statement): To ensure consistency in reporting

Any mismatch could trigger a notice from the Income Tax Department, so double-check this before submission.

9. Choose the Right ITR Form

Selecting the correct ITR form is critical:

• ITR-2: For capital gains from crypto (if not under business/profession)

• ITR-3: If you’re declaring crypto income as business or profession

• ITR-1 or ITR-4: Not suitable for crypto income

Using the wrong form may lead to rejection or legal complications.

10. File Before the Due Date

The due date for filing your ITR is generally 31st July for individuals (without audit) and 31st October for those with audited accounts.

Filing late not only attracts penalties but also restricts your ability to carry forward losses. If you miss the deadline, you’ll have to pay a late fee under section 234F.

Common Pitfalls to Avoid

Even with a checklist, many investors make avoidable errors. Here's what not to do:

• Ignoring small transactions

• Failing to report staking or NFT income

• Using incorrect conversion rates

• Forgetting to include gas/transaction fees

• Assuming peer-to-peer trades are tax-free

Always keep clean and verifiable records to avoid scrutiny.

Pro Tip: Use Tools for Tracking Crypto Taxes

Manually tracking transactions can be tedious, especially for active traders or those involved in DeFi. You can simplify the process using crypto tax reporting tools that automatically import transactions from wallets and exchanges, calculate gains/losses, and generate tax reports.

Some advanced tools even integrate with platforms like Track Dexair Sys and https://trackdexairsys.fr/ to provide real-time portfolio tracking and compliance assistance.

Final Thoughts

Crypto taxation in India has evolved from ambiguity to structure. In 2025, the onus is entirely on the investor to report every gain, loss, and crypto transaction with precision and transparency. This tax filing checklist is designed to ensure that you cover all bases and stay on the right side of the law.

Be proactive, keep accurate records, and consult a tax professional if you're unsure about any aspect of your crypto transactions. It’s better to stay ahead with clarity than to deal with compliance issues later.