Researched and last reviewed September 2026 · Written by the GiftMeCrypto research desk
Two separate regimes to keep apart. Gifts: the recipient is taxed on aggregate gifts above ₹50,000 from non-relatives; gifts from defined relatives are exempt at any value. Transfers: a flat 30% on VDA gains, 1% TDS withheld, and losses that cannot be set off or carried forward.
- Who is taxed on a gift
- The recipient, not the giver
- Threshold
- ₹50,000 aggregate per year, non-relatives
- Relatives
- Exempt, at any value
- VDA gains
- Flat 30%, cost of acquisition only
- TDS
- 1% on transfers
- Loss set-off
- Not permitted
The ₹50,000 rule
India's gift provisions tax the recipient. Where a person receives property without consideration, and the aggregate value in a financial year from persons who are not defined relatives exceeds ₹50,000, the amount is generally taxable as income from other sources.
Virtual digital assets are within the scope of these provisions, which means a crypto gift from a friend, colleague or an unrelated person is assessed the same way as any other property gift.
Who counts as a relative
This is the exemption that matters, and it is statutorily defined rather than a matter of judgement. Gifts from defined relatives are exempt regardless of value.
| Relationship | Exempt? |
|---|---|
| Spouse | Yes |
| Brother or sister | Yes |
| Brother or sister of the spouse | Yes |
| Brother or sister of either parent | Yes |
| Any lineal ascendant or descendant | Yes |
| Lineal ascendant or descendant of the spouse | Yes |
| Spouse of any of the above | Yes |
| Friend, colleague, cousin, unrelated person | No — subject to the ₹50,000 aggregate |
Swipe sideways →
Note that cousins are not within the statutory definition, which surprises people, and that certain occasions — notably gifts received on the occasion of the recipient's marriage — have their own treatment. Verify the current statutory list rather than working from a summary, including this one.
The flat 30% VDA tax
Separate from the gift rules, and applicable when a virtual digital asset is transferred — sold, exchanged, or used to buy something.
- A flat 30% rate on income from the transfer, rather than slab rates
- Only the cost of acquisition is deductible — no expenses, no allowances
- Losses cannot be set off against other income, or against gains from other VDAs
- Losses cannot be carried forward to later years
- It applies regardless of holding period — there is no long-term concession
The 1% TDS
Tax deducted at source at 1% on the transfer of virtual digital assets, withheld by the payer or the exchange and creditable against your final liability.
Two practical effects worth understanding:
- Cash-flow drag on frequent activity. It is not an additional tax, but 1% withheld on each transfer accumulates for anyone transacting often, and it is only recovered at assessment.
- Visibility. The mechanism creates a reporting trail at the exchange level. Any assumption that routine crypto activity is invisible to the department is not well founded — see our page on privacy versus non-reporting.
Records and reporting
- Record the cost of acquisition for every holding It is the only deduction available against VDA income.
- Record every gift received, with its rupee value and the donor relationship Because both the value and the relationship determine the treatment.
- Track the aggregate of non-relative gifts across the financial year The threshold is cumulative.
- Keep TDS certificates and exchange statements To claim credit at assessment.
- Report VDA income in the designated schedule of your return Separately from other income, given the distinct rate and set-off rules.
Primary sources
India is the jurisdiction where the rest of this site needs the loudest caveat. Most of what we write about — buying gift cards with crypto, funding everyday spending, converting between assets — is each a taxable transfer at a flat 30% with no loss relief, plus withholding. That is a completely different economics from the US or the UK.
The one piece of genuinely useful news is the relative exemption. Family gifting within the statutory definition is exempt at any value on the recipient side, which is more generous than it sounds. Everything else in this regime rewards holding over transacting, and the gift-card habits we recommend elsewhere deserve a conversation with a chartered accountant first.