Do I have to list every crypto trade separately in Schedule VDA, or can I report the net gain?
Every trade separately. Schedule VDA requires transaction-wise disclosure — type of VDA, date of acquisition, date of transfer, sale consideration, cost of acquisition, income from the transfer and the s.194S TDS — and consolidating gains across transactions is treated as a compliance error. Alongside that, crypto-asset service providers have their own duty to report crypto transactions in the prescribed form and to run due diligence to identify reportable persons.
Decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes, Foreign Tax & Tax Research Division) on 2026-07-24, reported as CBDT Guidance Note on the Crypto-Asset Reporting Framework for RCASPs, released 24 July 2026 (compliance with section 509 of the Income-tax Act, 2025, Rules 241 to 244 and Form 167 of the Income-tax Rules, 2026). It bears on section 285BAA, section 509 (Act of 2025), section 115BBH, section 194S of the Income Tax Act 1961, in Crypto & Virtual Digital Assets matters.
This one is on the Department's side and the reader needs to know it. Because s.115BBH allows no deduction except cost of acquisition and no set-off of losses, netting a losing trade against a winning one gives by presentation what the section refuses in law — so the return was built to demand the granularity that makes that impossible. The Schedule VDA figures are also designed to be matched against the withholding trail that exchanges generate under Circulars 13 and 14 of 2022, and the third-party reporting duty supplies an independent check on what the taxpayer himself declares. Where a client has filed a single consolidated crypto figure, expect the mismatch to surface rather than pass.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
Read aloud by your device. Press again to stop.
Once virtual digital assets became separately chargeable, the Department needed independent information from the platforms through which crypto transactions pass, and it needed the return itself to disclose those transactions rather than leaving them in a single aggregate figure. On the return side a dedicated Schedule VDA was introduced in the ITR forms. On the third-party side, section 285BAA was inserted into the Income-tax Act, 1961 by section 90 of the Finance Act, 2025, obliging a prescribed reporting entity to furnish information about transactions in crypto-assets. That provision is carried into the Income-tax Act, 2025 as section 509, and the machinery sits in rules 241 to 244 of the Income-tax Rules, 2026 - rule 241 defining the terms, rule 242 fixing who is a reporting crypto-asset service provider subject to the obligation, rule 243 the reporting requirements and rule 244 the due diligence procedures. In July 2026 the CBDT's Foreign Tax & Tax Research Division is reported to have issued a Guidance Note telling reporting crypto-asset service providers how to comply.
Section 509 obliges any person who is a prescribed reporting entity in respect of a crypto-asset to furnish information about transactions in that crypto-asset in a statement, for the period, within the time, in the form and manner and to the income-tax authority prescribed. If the authority considers the statement defective it must intimate the defect and allow thirty days, or longer, to rectify; if the defect is not cured the Act applies as though inaccurate information had been furnished. If no statement is filed in time the authority may serve a notice requiring one within not more than thirty days. A person who later discovers an inaccuracy in a statement already furnished must inform the authority and furnish the correct information within ten days. The Central Government may make rules requiring such persons to register with the prescribed authority, prescribing the nature of the information and how it is to be maintained, and prescribing the due diligence to be carried out to identify a crypto-asset user or owner. Rule 242 fixes the nexus: a reporting crypto-asset service provider is subject to rules 243 and 244 if it is an entity or individual resident in India for tax purposes, an entity incorporated or organised under Indian law, an entity with legal personality in India or an obligation to file a return under section 263, an entity managed from India, or an entity or individual with a regular place of business in India, and also in respect of relevant transactions effected through a branch based in India. The obligation drops away where the same requirements are completed in a partner jurisdiction on a substantially similar nexus, or by a branch in a partner jurisdiction, subject in one case to a notification being lodged with India.
The design puts the verification burden where the data is. A taxpayer's own schedule is only as good as the records behind it, so the reporting duty is cast on the service provider, which holds transaction data in usable form and is in any case already the deductor under section 194S. Section 509 is drafted as machinery rather than substance: it leaves the period, time, form, manner and recipient authority to rules, and separately empowers rules on registration, on how information is to be maintained, and on due diligence to identify the user or owner - so the obligation can be tuned to the Crypto-Asset Reporting Framework without amending the Act. The enforcement design is graduated rather than punitive at first instance: a defective statement gets an intimation and thirty days, a missing statement gets a notice and up to thirty days, and an inaccuracy the filer itself discovers must be reported within ten days; only an uncured defect is deemed to be inaccurate information. Rule 242 then avoids duplicate reporting across jurisdictions by relieving a provider that has completed the same requirements in a partner jurisdiction on a substantially similar nexus, which is what makes a multi-jurisdiction platform report once rather than everywhere. 'Crypto-asset' is not defined in section 509 itself; it takes the meaning given in section 2(111)(d).
Any person, being a reporting entity, as may be prescribed, in respect of a crypto-asset, shall furnish information in respect of a transaction of such crypto-asset in a statement, for such period, within such time, in such form and manner and to such income-tax authority, as may be prescribed.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppEvery trade separately. Schedule VDA requires transaction-wise disclosure — type of VDA, date of acquisition, date of transfer, sale consideration, cost of acquisition, income from the transfer and the s.194S TDS — and consolidating gains across transactions is treated as a compliance error. Alongside that, crypto-asset service providers have their own duty to report crypto transactions in the prescribed form and to run due diligence to identify reportable persons. This was decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes, Foreign Tax & Tax Research Division) and bears on section 285BAA, section 509 (Act of 2025), section 115BBH, section 194S of the Income Tax Act 1961. It is reported as CBDT Guidance Note on the Crypto-Asset Reporting Framework for RCASPs, released 24 July 2026 (compliance with section 509 of the Income-tax Act, 2025, Rules 241 to 244 and Form 167 of the Income-tax Rules, 2026). This one is on the Department's side and the reader needs to know it. Because s.115BBH allows no deduction except cost of acquisition and no set-off of losses, netting a losing trade against a winning one gives by presentation what the section refuses in law — so the return was built to demand the granularity that makes that impossible. The Schedule VDA figures are also designed to be matched against the withholding trail that exchanges generate under Circulars 13 and 14 of 2022, and the third-party reporting duty supplies an independent check on what the taxpayer himself declares. Where a client has filed a single consolidated crypto figure, expect the mismatch to surface rather than pass. If it applies to you, the first step is this: Rebuild the client's crypto position trade by trade before filing, capturing acquisition and transfer dates, consideration, cost and TDS for each, rather than starting from an aggregate profit-and-loss figure.
Once virtual digital assets became separately chargeable, the Department needed independent information from the platforms through which crypto transactions pass, and it needed the return itself to disclose those transactions rather than leaving them in a single aggregate figure. On the return side a dedicated Schedule VDA was introduced in the ITR forms. On the third-party side, section 285BAA was inserted into the Income-tax Act, 1961 by section 90 of the Finance Act, 2025, obliging a prescribed reporting entity to furnish information about transactions in crypto-assets. That provision is carried into the Income-tax Act, 2025 as section 509, and the machinery sits in rules 241 to 244 of the Income-tax Rules, 2026 - rule 241 defining the terms, rule 242 fixing who is a reporting crypto-asset service provider subject to the obligation, rule 243 the reporting requirements and rule 244 the due diligence procedures. In July 2026 the CBDT's Foreign Tax & Tax Research Division is reported to have issued a Guidance Note telling reporting crypto-asset service providers how to comply. The matter was decided on 2026-07-24 by the CBDT Circulars & Instructions (Central Board of Direct Taxes, Foreign Tax & Tax Research Division). On those facts the CBDT Circulars & Instructions held as follows. Section 509 obliges any person who is a prescribed reporting entity in respect of a crypto-asset to furnish information about transactions in that crypto-asset in a statement, for the period, within the time, in the form and manner and to the income-tax authority prescribed. If the authority considers the statement defective it must intimate the defect and allow thirty days, or longer, to rectify; if the defect is not cured the Act applies as though inaccurate information had been furnished. If no statement is filed in time the authority may serve a notice requiring one within not more than thirty days. A person who later discovers an inaccuracy in a statement already furnished must inform the authority and furnish the correct information within ten days. The Central Government may make rules requiring such persons to register with the prescribed authority, prescribing the nature of the information and how it is to be maintained, and prescribing the due diligence to be carried out to identify a crypto-asset user or owner. Rule 242 fixes the nexus: a reporting crypto-asset service provider is subject to rules 243 and 244 if it is an entity or individual resident in India for tax purposes, an entity incorporated or organised under Indian law, an entity with legal personality in India or an obligation to file a return under section 263, an entity managed from India, or an entity or individual with a regular place of business in India, and also in respect of relevant transactions effected through a branch based in India. The obligation drops away where the same requirements are completed in a partner jurisdiction on a substantially similar nexus, or by a branch in a partner jurisdiction, subject in one case to a notification being lodged with India.
The design puts the verification burden where the data is. A taxpayer's own schedule is only as good as the records behind it, so the reporting duty is cast on the service provider, which holds transaction data in usable form and is in any case already the deductor under section 194S. Section 509 is drafted as machinery rather than substance: it leaves the period, time, form, manner and recipient authority to rules, and separately empowers rules on registration, on how information is to be maintained, and on due diligence to identify the user or owner - so the obligation can be tuned to the Crypto-Asset Reporting Framework without amending the Act. The enforcement design is graduated rather than punitive at first instance: a defective statement gets an intimation and thirty days, a missing statement gets a notice and up to thirty days, and an inaccuracy the filer itself discovers must be reported within ten days; only an uncured defect is deemed to be inaccurate information. Rule 242 then avoids duplicate reporting across jurisdictions by relieving a provider that has completed the same requirements in a partner jurisdiction on a substantially similar nexus, which is what makes a multi-jurisdiction platform report once rather than everywhere. 'Crypto-asset' is not defined in section 509 itself; it takes the meaning given in section 2(111)(d). In the words reproduced by the source cited on this page: "Any person, being a reporting entity, as may be prescribed, in respect of a crypto-asset, shall furnish information in respect of a transaction of such crypto-asset in a statement, for such period, within such time, in such form and manner and to such income-tax authority, as may be prescribed."
It was decided by the CBDT Circulars & Instructions on 2026-07-24 and is reported as CBDT Guidance Note on the Crypto-Asset Reporting Framework for RCASPs, released 24 July 2026 (compliance with section 509 of the Income-tax Act, 2025, Rules 241 to 244 and Form 167 of the Income-tax Rules, 2026). Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 285BAA, section 509 (Act of 2025), section 115BBH, section 194S, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. Section 509 obliges any person who is a prescribed reporting entity in respect of a crypto-asset to furnish information about transactions in that crypto-asset in a statement, for the period, within the time, in the form and manner and to the income-tax authority prescribed. If the authority considers the statement defective it must intimate the defect and allow thirty days, or longer, to rectify; if the defect is not cured the Act applies as though inaccurate information had been furnished. If no statement is filed in time the authority may serve a notice requiring one within not more than thirty days. A person who later discovers an inaccuracy in a statement already furnished must inform the authority and furnish the correct information within ten days. The Central Government may make rules requiring such persons to register with the prescribed authority, prescribing the nature of the information and how it is to be maintained, and prescribing the due diligence to be carried out to identify a crypto-asset user or owner. Rule 242 fixes the nexus: a reporting crypto-asset service provider is subject to rules 243 and 244 if it is an entity or individual resident in India for tax purposes, an entity incorporated or organised under Indian law, an entity with legal personality in India or an obligation to file a return under section 263, an entity managed from India, or an entity or individual with a regular place of business in India, and also in respect of relevant transactions effected through a branch based in India. The obligation drops away where the same requirements are completed in a partner jurisdiction on a substantially similar nexus, or by a branch in a partner jurisdiction, subject in one case to a notification being lodged with India. It arises in Crypto & Virtual Digital Assets matters, on section 285BAA, section 509 (Act of 2025), section 115BBH, section 194S of the Income Tax Act 1961, and was decided by Central Board of Direct Taxes, Foreign Tax & Tax Research Division. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Reconcile the s.194S TDS shown in Schedule VDA against the exchange statements and Form 26AS, since that is the comparison the Department is set up to run. Where a return already carries a consolidated figure, treat it as a defect to be corrected on your own initiative and document the recomputation. Do not set losing trades against gains in the schedule and then argue the point later; the schedule is where the denial of set-off is enforced.
The judgment itself could not be reached, so no check was possible. The statutory framework is confirmed and in force: section 285BAA was inserted into the Income-tax Act, 1961 by section 90 of the Finance Act, 2025, its counterpart in the Income-tax Act, 2025 is section 509, and rules 241 to 244 of the Income-tax Rules, 2026 carry the definitions, the reporting nexus, the reporting requirements and the due diligence procedures. The Guidance Note itself could not be found in a subscription database. Searches were run on 'Reporting Crypto-Asset Service Provider', which returned the section, the rules and the amending notification but no guidance note; on the guidance note's subject matter with the rule numbers, which returned nothing; and on its title restricted to circulars and notifications, which returned one unrelated IFSCA circular. Its date is also uncertain - it is reported as 24 July 2026 here and as 27 July 2026 in the companion entry on Notification No. 19/2026. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The Guidance Note could not be found in a subscription database on searches of its title, of its subject matter with the rule numbers, and of its title restricted to circulars and notifications; treat the citation and its date as unconfirmed. The statutory position, by contrast, is now settled and needs no inference: section 285BAA of the Income-tax Act, 1961 was inserted by section 90 of the Finance Act, 2025, and section 509 of the Income-tax Act, 2025 is its counterpart, with rules 241 to 244 of the Income-tax Rules, 2026 supplying the machinery. Watch two things in the entry that remain unverified. The Schedule VDA particulars - that each transaction must be shown separately with type of asset, dates of acquisition and transfer, consideration, cost, income and TDS under section 194S, and that netting is a compliance error - come from commentary and were not checked against any ITR form or instruction. And Form 167, said to be the prescribed form, was not verified against rule 243. The Guidance Note was not located and its date is reported inconsistently as 24 and 27 July 2026. Rule 243, which prescribes the reporting requirements, and rule 241, which defines 'reporting crypto-asset service provider', were not read, so the prescribed form, the reporting period and the due date are unverified, and Form 167 is unconfirmed. The penalty for non-reporting was not identified. The Schedule VDA particulars and the assessment year from which the schedule was first required were not verified against any ITR form or instruction. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Section 509 obliges any person who is a prescribed reporting entity in respect of a crypto-asset to furnish information about transactions in that crypto-asset in a statement, for the period, within the time, in the form and manner and to the income-tax authority prescribed. If the authority considers the statement defective it must intimate the defect and allow thirty days, or longer, to rectify; if the defect is not cured the Act applies as though inaccurate information had been furnished. If no statement is filed in time the authority may serve a notice requiring one within not more than thirty days. A person who later discovers an inaccuracy in a statement already furnished must inform the authority and furnish the correct information within ten days. The Central Government may make rules requiring such persons to register with the prescribed authority, prescribing the nature of the information and how it is to be maintained, and prescribing the due diligence to be carried out to identify a crypto-asset user or owner. Rule 242 fixes the nexus: a reporting crypto-asset service provider is subject to rules 243 and 244 if it is an entity or individual resident in India for tax purposes, an entity incorporated or organised under Indian law, an entity with legal personality in India or an obligation to file a return under section 263, an entity managed from India, or an entity or individual with a regular place of business in India, and also in respect of relevant transactions effected through a branch based in India. The obligation drops away where the same requirements are completed in a partner jurisdiction on a substantially similar nexus, or by a branch in a partner jurisdiction, subject in one case to a notification being lodged with India.
TaxSphere, “CBDT Guidance Note on crypto-asset reporting”, https://taxnotice.vittsphere.com/caselaw/case/cbdt-guidance-note-crypto-asset-reporting/ (validity last checked 2026-08-19)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
Do I have to report my crypto holdings now, or does the exchange do it for me?
The notice says my client dealt in a 'virtual digital asset'. What actually falls inside that definition, and are vouchers, reward points and NFTs inside it?
Our exchange has been told it is a 'reporting entity' for crypto-assets. What does section 285BAA actually require, and is section 115BBI part of the same regime?
I sold Bitcoin in FY 2020-21, before the VDA regime — capital gains or income from other sources?
