Crypto Tax Filing India: Check Form 26AS, Section 194S Before Filing ITR

Crypto traders, this is your ITR warning bell. If you bought, sold, swapped, or traded crypto on Indian exchanges during FY 2025-26, there is a good chance those transactions are already sitting against your PAN.

And no, deleting the app will not delete the tax trail.

For Assessment Year 2026-27, ITR filing is live. Indian crypto exchanges may have reported your Virtual Digital Asset transactions under Section 194S. You must check your Form 26AS, AIS, exchange trade reports, and Schedule VDA before filing your return.

This guide is for every Indian crypto user who wants to file correctly, avoid mismatch notices, and sleep peacefully after submitting ITR.

Why Crypto Traders Must Check Form 26AS This Year

When you trade crypto on an Indian centralised exchange, the exchange may deduct 1% TDS on eligible VDA transactions under Section 194S.

That TDS does not disappear. It gets linked to your PAN.

This means the Income Tax Department may already have a record that you traded crypto. If your ITR says nothing about crypto income, but your 26AS or AIS shows Section 194S entries, the system may flag a mismatch.

That mismatch can later become a notice, clarification request, or tax demand.

What Is Section 194S?

Section 194S deals with TDS on transfer of Virtual Digital Assets, also called VDAs. Crypto assets such as Bitcoin, Ethereum, USDT, Solana, meme coins, and many tokens can fall under this category.

In simple words:

• When eligible crypto transactions happen, 1% TDS may be deducted.
• This TDS is reported against your PAN.
• You can see it in Form 26AS or AIS.
• You can claim this TDS credit while filing your ITR.

But here is the biggest mistake people make:

The amount shown under 194S is not always your profit. It can be the gross trade value or transaction value on which TDS was deducted.

So do not blindly treat the 26AS amount as income. You must calculate actual profit or loss using your trade history.

Crypto Tax in India: The Basic Rule

Crypto gains in India are taxed under the Virtual Digital Asset framework. The broad rule is:

• 30% tax on income from transfer of VDAs.
• Applicable surcharge and cess may also apply.
• Only cost of acquisition is generally allowed as deduction.
• Loss from one VDA cannot be set off against other income.
• VDA loss cannot be carried forward to future years.
• 1% TDS under 194S is not final tax. It is tax credit.

Example: You bought a token for ₹50,000 and sold it for ₹80,000. Your taxable VDA income is ₹30,000. The tax is calculated on that gain, not on the full sale amount.

But if you bought a token for ₹80,000 and sold it for ₹50,000, that loss generally cannot be used to reduce your salary income, stock gains, or profit from another crypto sale.

What You Must Download Before Filing ITR

Do not start your ITR with guesswork. Start with documents.

Keep these ready:

• Form 26AS
• Annual Information Statement, also called AIS
• Taxpayer Information Summary, also called TIS
• Trade history from each crypto exchange
• Deposit and withdrawal history
• TDS report or Form 16A from the exchange, if available
• Wallet transaction history, if you moved crypto outside exchanges
• Bank statement for INR deposits and withdrawals

If you used multiple exchanges, download reports from all of them. Do not rely only on one app.

How to Check Form 26AS for Crypto TDS

Follow these steps carefully:

1. Go to the official Income Tax portal: incometax.gov.in
2. Login using your PAN or user ID.
3. Go to e-File.
4. Select Income Tax Returns.
5. Click View Form 26AS.
6. You will be redirected to the TRACES portal.
7. Select Assessment Year 2026-27.
8. Choose HTML view.
9. Export or download the PDF.
10. Search for entries under Section 194S.

If you find 194S entries, do not panic. It simply means crypto-related TDS was reported against your PAN.

Your next step is to match those entries with your actual exchange trade history.

Common Exchange Names You May See in 26AS

One confusing part is that your exchange name may not appear exactly as the app name.

Sometimes the legal entity name appears instead.

If you see an unknown name under Section 194S, search that deductor name and compare it with exchanges you used. You can also check your email inbox for TDS certificates, trade reports, and exchange tax statements.

The Biggest Trap: 26AS Amount Is Not Always Profit

This is where many crypto users get confused.

Your Form 26AS may show an “amount paid or credited” under Section 194S. That figure may represent the volume of trades where TDS was deducted. It does not automatically mean that entire amount is your income.

Example:

• You sold crypto worth ₹1,00,000.
• Exchange deducted 1% TDS, which is ₹1,000.
• Your 26AS may show ₹1,00,000 as amount paid or credited.
• But if your purchase cost was ₹90,000, your gain may be ₹10,000.

So, your job is not just to copy numbers from 26AS. Your job is to reconcile 26AS with trade history.

How to Reconcile Crypto Trades Before Filing ITR

Use this simple checklist:

1. Download Form 26AS and AIS.
2. Note every Section 194S entry.
3. Identify the exchange or deductor.
4. Download trade history from that exchange.
5. Separate buy trades, sell trades, swaps, and crypto-to-crypto trades.
6. Calculate sale value and cost of acquisition.
7. Calculate profit for each taxable transfer.
8. Report VDA income in the correct ITR schedule.
9. Claim TDS credit shown in 26AS/AIS.
10. Pay additional tax, if your final tax is higher than TDS already deducted.

For active traders, using a spreadsheet or crypto tax tool may help. But always verify the final numbers yourself.

Which ITR Form Should Crypto Traders Use?

The right ITR form depends on your full income profile.

As a general guide:

• ITR-1: Usually not suitable if you have VDA income.
• ITR-2: May apply if you have crypto capital gains but no business or professional income.
• ITR-3: May apply if your crypto activity is treated as business/professional income or you have business income.
• ITR-4: May apply only in specific presumptive business cases, but crypto reporting can be tricky.

If you are unsure between ITR-2 and ITR-3, ask a CA. Filing the wrong form can create issues later.

Where to Report Crypto in ITR

Crypto transactions are generally reported in Schedule VDA in applicable ITR forms.

This schedule is important because it captures VDA transfer details. You may need to report information such as sale consideration, cost of acquisition, and resulting income.

If there is a loss, it may be reported as nil in Schedule VDA as per the ITR structure. Positive VDA income is carried into the relevant tax schedule.

Do not hide crypto income under “other income” just because it feels easier. Use the correct schedule.

What About Crypto Airdrops?

Airdrops can be more complicated than normal exchange trades.

If you received free tokens, joined a campaign, claimed rewards, or got tokens from a project, taxation may depend on the facts. The key questions are:

• Did you receive tokens for free?
• Was it a reward for completing tasks?
• Was there a fair market value when received?
• Did you later sell or swap the tokens?
• Was the token listed on an exchange?

Do not assume “free token means no tax.” If you received and later sold the token, keep records of date, value, wallet address, and exchange transaction.

What About P2P, DEX, and Wallet Trades?

Form 26AS may not show every crypto transaction, especially if it happened outside Indian exchanges.

That does not mean the transaction is invisible or tax-free.

If you used foreign exchanges, decentralised exchanges, self-custody wallets, bridges, or P2P trades, you should still keep records and report applicable income correctly.

Remember: ITR filing is not only about what appears in 26AS. AIS itself says taxpayers must report complete and accurate information.

Red Flags That Can Trigger Trouble

Here are common mistakes that can create tax issues:

• Ignoring Section 194S entries in Form 26AS.
• Thinking 1% TDS is the final crypto tax.
• Reporting gross 26AS amount as profit without checking cost.
• Not reporting crypto income at all.
• Using the wrong ITR form.
• Forgetting crypto-to-crypto swaps.
• Not downloading trade reports before exchanges change formats.
• Mixing personal wallet transfers with taxable sales.
• Ignoring small trades because the amount feels low.

Crypto ITR Filing Checklist for FY 2025-26

Bookmark this part before you file.

• Check Form 26AS for Section 194S.
• Check AIS and TIS.
• Download all exchange trade reports.
• Download TDS reports and Form 16A, if available.
• Match exchange names with legal entity names.
• Calculate actual VDA profit, not just trade volume.
• Check if your losses are being wrongly set off.
• Select the correct ITR form.
• Fill Schedule VDA correctly.
• Claim TDS credit correctly.
• Pay self-assessment tax if needed.
• E-verify your ITR after filing.

Final Word: Do Not File Blindly

Crypto taxes in India are no longer a grey spreadsheet hidden on your laptop. If you used Indian exchanges, the tax trail may already be mapped to your PAN through Section 194S.

That is not something to fear. It is something to handle properly.

Before filing your ITR for AY 2026-27, check Form 26AS, AIS, and your exchange reports. Match the data. Calculate real profits. Report crypto in the right schedule. Claim TDS credit. Pay tax if due.

The safest ITR is not the fastest one.

It is the one that matches the data the Income Tax Department already has.

Bookmark this guide before you file. It may save you from a notice later.