Calculate NFT tax per Sec 115BBH

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India taxes NFT gains at flat 30% + 4% cess, with 1% TDS at sale. No loss set-off allowed against other income.

Sec 115BBH Compliant 1% TDS Included Live Calculation

Transaction details

VDAs (NFT/crypto) are taxed at flat 30% on gains. No deductions allowed except cost of acquisition.

Purchase price (cost of acquisition)

Sale price

NFT tax rules (India)

30% flat tax — on gains, regardless of holding period.
4% cess — Health & Education cess on tax.
1% TDS — on every sale ≥ ₹10K, deducted at source.
No loss set-off — NFT losses cannot offset any income.
No expenses — only acquisition cost is deductible.
Gifts taxed — receiving NFT as gift > ₹50K is taxable.

Total tax payable

₹93,600

30% tax + 4% cess on gain of ₹3.00 L (no loss set-off)

Sale price₹5.00 L

Purchase price₹2.00 L

Gain₹3.00 L

Tax (30%)₹90,000 (30%)

Cess (4% on tax)₹3,600 (4%)

Total tax₹93,600

TDS at sale₹5,000 (1% of sale)

Net to you after tax₹2.06 L

How NFT tax works in India

Section 115BBH (Budget 2022) introduced a special 30% flat tax on Virtual Digital Asset (VDA) income, including NFTs.

01
Gain only
Sale price minus cost of acquisition. No other expenses (gas fees, platform fees) deductible.
```
gain = sell − buy
```
02
Flat 30%
Apply 30% tax regardless of holding period or your income slab.
```
tax = gain × 0.30
```
03
Cess + TDS
Add 4% health/edu cess. Plus 1% TDS is already deducted at the time of sale.
```
total = tax × 1.04
tds = sell × 0.01
```

FormulaTax = gain × 30% × 1.04 (cess); TDS = sale × 1%TDS u/s 194S applies if sale ≥ ₹10K (₹50K for specified persons).

Why we use this formula by default.
Indian payroll convention, statutory references, and the SaaS tooling that runs payroll all converge on this approach. Below are the authoritative sources we cross-checked.

Statute

Section 115BBH Income Tax Act

VDA (Virtual Digital Asset) flat 30% tax regime (Budget 2022).

Authority

CBDT Circulars

Central Board of Direct Taxes implementation guidance for VDA.

TDS Rule

Section 194S — 1% TDS

1% TDS on every NFT transfer ≥ ₹10K, deducted at source.

Tax SaaS

Koinly / KoinX

India-focused crypto/NFT tax computation tools.

Tax Reference

ClearTax Crypto Guide

Comprehensive Indian NFT/crypto tax FAQ and ITR filing.

Budget Speech

Budget 2022 Speech

Finance Minister's announcement on VDA taxation framework.

FAQs about NFT taxation

Is NFT taxed even if I hold long-term?

Yes. Unlike stocks or property, there's no LTCG/STCG distinction for NFTs. 30% flat tax applies regardless of holding period. Section 115BBH overrides normal capital gains rules.

Can I deduct gas/platform fees?

No. Section 115BBH explicitly disallows any expenditure other than cost of acquisition. Mint costs are arguable (some consider them part of acquisition; safer to consult a CA).

Can I set off NFT losses?

No — neither against NFT gains nor any other income. Losses cannot be carried forward either. This makes NFT investing strictly tax-asymmetric: gains taxed, losses absorbed.

What is the 1% TDS rule?

Section 194S: 1% TDS on every NFT sale ≥ ₹10K (₹50K for specified persons — businesses, etc.). Buyer or exchange deducts and deposits. You can claim it as advance tax during ITR.

Do I need to report small NFT trades?

Yes. Every NFT sale is a taxable event. Even small trades must be reported in Schedule VDA of ITR. Failure to report = misreporting penalty (50% of tax) + interest.

What about NFTs received as gifts or airdrops?

Gifts > ₹50K total (in a year): fully taxable as "income from other sources" at slab rate. From a relative: tax-free. Airdrops: tax at receipt at FMV; subsequent gain on sale taxed at 30%.

Can I convert NFT to crypto without tax?

No. Crypto-for-NFT or NFT-for-NFT swaps are treated as separate sale + purchase. Each leg is a taxable event at fair market value.

Which ITR form for NFT income?

Individuals: ITR-2 or ITR-3 (if business income). Schedule VDA introduced in AY 2023-24 specifically for crypto/NFT reporting. Foreign-held NFTs: additional Schedule FA disclosure.

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Calculate NFT tax per Sec 115BBH

Transaction details

NFT tax rules (India)

How NFT tax works in India

Gain only

Flat 30%

Cess + TDS

Section 115BBH Income Tax Act

CBDT Circulars

Section 194S — 1% TDS

Koinly / KoinX

ClearTax Crypto Guide

Budget 2022 Speech

FAQs about NFT taxation

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