Cryptocurrencies, Non-Fungible Tokens (NFTs) and similar virtual tokens or currencies are considered as Virtual Digital Assets (VDAs). In India, presently, any income earned out of these VDAs are taxed at 30% without the benefit of set-off or carry forward of losses.

If a resident transfers a VDA (Crypto Currency or NFT or the like) for consideration, the person responsible for paying that consideration must deduct 1% of the consideration at source as income tax. The requirement to deduct 1% of the consideration applies irrespective of whether the consideration is in cash, partly in cash and partly in consideration for another VDA, or in consideration for only another VDA.