Crypto Tax in India vs the US: A Comparison for Cross-Border Founders and Investors

For cross-border founders and investors, crypto taxes can be confusing enough in one country. Split your life between India and the United States, or hold crypto as an Indian resident with a US company, and you’re dealing with two systems built on very different ideas.

This guide compares crypto tax in India vs the US: how gains are taxed, how losses work, the reporting systems, residency rules and the India-US tax treaty. It’s written for founders, employees and investors with a foot in both countries. Halverton & Co. advises on Indian law only, so take US tax advice from a US tax professional. For the Indian rules in depth, see our guide to crypto tax in India.

The basic rates: flat 30% vs capital gains

India taxes income from transferring virtual digital assets at a flat 30%, plus cess, regardless of the investor’s income bracket or how long the asset was held. There’s no lower rate for long-term holdings, and no deduction other than cost of acquisition. The regime continues under the Income-tax Act, 2025, effective April 1, 2026, with the VDA definition now expressly including crypto-assets.

The US treats cryptocurrency as property for federal tax purposes. Gains on assets held for a year or less are short-term capital gains, taxed at ordinary income rates, while gains on assets held longer than a year are long-term capital gains, taxed at preferential rates. Crypto received as income, for example for services or mining, is taxed as ordinary income when received.

Mining, staking and airdrops add complexity in both countries. In India, receipts may be taxed as income and later transfers taxed again at 30% on gains, while in the US, rewards are generally treated as income when received, with later gains taxed as capital gains. The timing and valuation rules differ, which makes record-keeping essential. So in the comparison of crypto tax in India vs the US, the first difference is structural. India uses a single high flat rate for all gains. The US rewards holding for more than a year.

Losses: India’s biggest difference

Losses are where the two systems diverge most sharply. In India, a loss on one VDA can’t be set off against gains on another VDA, or against any other income, and can’t be carried forward. An investor who gains ₹1 lakh on one coin and loses ₹1 lakh on another still pays 30% tax on the full gain.

In the US, capital losses from crypto can offset capital gains, and net capital losses can offset a limited amount of ordinary income each year, with any excess carried forward. That makes loss harvesting a meaningful planning tool in the US. In India, it has no effect.

Stablecoins are also treated differently in practice. In India, even small gains on dollar-pegged stablecoins caused by rupee movements are taxed at 30%, because stablecoins are virtual digital assets; see our guide to stablecoins in India. For a cross-border investor, this difference can be decisive. A trading strategy that’s tax-efficient in the US may be very expensive in India, especially for active traders with many small gains and losses.

Reporting: TDS and Section 509 vs Form 1099-DA

Both countries have built reporting systems so that tax authorities can see crypto activity. India introduced a 1% TDS on crypto transfers in July 2022, which acts as a direct report to the tax department. Since April 1, 2026, reporting entities, including crypto exchanges, must also report crypto-asset transactions under Section 509 of the Income-tax Act, 2025. India’s tax department has sent tens of thousands of “nudge” messages to taxpayers with unreported crypto activity; see our guide to the crypto nudge email.

The US has introduced broker reporting on Form 1099-DA, under which brokers report digital asset sales, phasing in from 2025 transactions, with cost basis reporting following. The US also asks a digital asset question on the individual income tax return.

Internationally, both countries are part of the move toward automatic exchange of crypto information, including the OECD’s Crypto-Asset Reporting Framework, under which data on holdings with foreign exchanges is shared between tax authorities. Cross-border investors should assume both countries will eventually see their activity.

Residency, double taxation and the India-US treaty

The key question for cross-border founders is where they’re taxed. India taxes its residents on worldwide income, and residence depends mainly on days spent in India. The US taxes its citizens and green card holders on worldwide income wherever they live, and others based on residence tests.

Founders who move from India to the US, or the reverse, should also think about timing. Selling crypto before or after a change in residence can lead to very different results, and the rules on when residence starts and ends differ between the two countries. That creates double taxation risk. A US citizen living in India, or an Indian resident with US-source crypto income, may be taxable in both countries on the same gain. The India-US tax treaty and each country’s foreign tax credit rules are designed to reduce double taxation, but because the two countries tax crypto differently, in timing, rate and loss treatment, credits may not line up neatly.

Indian residents holding crypto on US or other foreign exchanges must also disclose those holdings in Schedule FA of their Indian return. India’s Black Money Act imposes heavy penalties for undisclosed foreign assets. US persons have their own foreign account and asset reporting obligations, which should be reviewed with a US adviser. If you’re building a company across both countries, see our guide to building a Web3 startup with an Indian team.

Planning points, remedies and quick answers

For cross-border founders and investors, a few planning points apply in almost every case: track your residency days carefully, keep complete records of cost basis and transactions on every exchange and wallet, avoid assuming that US loss-harvesting strategies work in India, and get advice before moving between countries with large unrealized gains.

If you’ve under-reported in India, the updated return (ITR-U) mechanism allows corrections within 48 months of the end of the relevant assessment year, with additional tax, which is far cheaper than penalties after a notice. Indian tax disputes can be appealed to the Commissioner (Appeals) and the Income Tax Appellate Tribunal. Comparing crypto tax in India vs the US is the first step; coordinated advice in both countries is the second. For the Indian renumbering of the tax law, see our guide to the Income-tax Act 2025, and for inheritance planning, our guide to crypto inheritance in India. All US tax statements here are general and should be reviewed by a US tax professional.

Quick answers

What is the crypto tax rate in India compared with the US?

India taxes crypto gains at a flat 30% plus cess. The US taxes them as capital gains, at ordinary rates for short-term and lower rates for long-term holdings.

Can I offset crypto losses in India like in the US?

No. India doesn’t allow crypto losses to be set off or carried forward, unlike the US.

Do I need to report US exchange holdings in India?

Yes, if you’re an Indian resident. Foreign assets must be disclosed in Schedule FA of your Indian return.

Related reading: crypto tax in India vs the UK; also Indian tax on crypto after moving to Dubai.

Final word

Halverton & Co. is an Indian law firm that advises on Indian law, including Indian crypto taxation, VDA reporting, foreign asset disclosure and tax disputes for cross-border founders and investors. We practice in Jharkhand, Maharashtra and before the Supreme Court of India, and we work alongside US counsel, who advise on US law. Halverton & Co.: Where tech needs law! If you have a question about Indian law, write to us at office@halvertonandco.com, or get in touch.

This article reflects developments reported up to early October 2026. It is for general information only, is not legal advice, and does not create an attorney-client relationship. Halverton & Co. is an Indian law firm and does not advise on US law.