India Taxes Cryptocurrencies at 30% with 1% TDS on Transfers

The rise of Virtual Digital Assets (VDAs) has forced tax systems worldwide to adapt. In India, cryptocurrencies exist in a regulatory grey zone, they are not ‘legal tender’ under RBI Act 1934, yet they generate substantial economic value.

India's attempt to tax what it refuses to legally recognize captures the central paradox of crypto taxation today. The Finance Act 2022 introduced a flat 30% tax + 1% TDS on VDA transfers, making India one of the highest-taxed crypto jurisdictions.

This created more questions than answers: What is the taxable event? How is cost of acquisition determined? Are airdrops income?