For most individual taxpayers filing returns for Assessment Year 2026-27 (Financial Year 2025-26), the deadline is July 31, 2026. According to tax experts, the filing process requires careful attention to detail, particularly for crypto investors who must reconcile multiple transaction records. The Income Tax Department has progressively enabled online filing utilities for ITR-1, ITR-2, ITR-3 and ITR-4, ensuring taxpayers across categories can complete their returns electronically.
Many investors incorrectly assume tax arises only when crypto is converted into rupees. As reported by tax experts, selling Bitcoin, exchanging Ethereum for Solana, or transferring one VDA for another may all amount to taxable transfers. These transactions require reporting through Schedule VDA, which seeks transaction-wise details such as the acquisition date, transfer date, cost of acquisition, and sale consideration. The 30% tax on gains from VDA transfers applies widely, but what is less understood is the treatment of expenses - only acquisition cost is generally deductible, while trading expenses typically do not qualify as deductions.
Before filing, crypto investors must reconcile five sets of records: exchange transaction history, wallet records, bank statements, the Annual Information Statement (AIS), and Form 26AS. According to tax experts, most filing mistakes do not arise because taxpayers hide transactions, but occur when one record does not match others. The 1% Tax Deducted at Source (TDS) applies to qualifying transfers above prescribed thresholds, generally ₹10,000 in aggregate consideration during a financial year or ₹50,000 for specified persons, but this functions as a tax credit that should be correctly reflected in the return.
The location of the exchange does not change the tax position under Indian law. As reported by tax experts, whether the transaction took place on an Indian platform or overseas, Indian tax obligations arise under Indian law. The practical implication is that investors must preserve every purchase record, sale invoice, wallet transfer and exchange statement. Good documentation is often the difference between a smooth filing experience and a lengthy reconstruction exercise months later.
While July 31 is the primary deadline, the compliance calendar extends beyond this date. According to tax experts, the due date is August 31, 2026 for many non-audit business and professional taxpayers; October 31 for tax-audit cases; and November 30 where transfer pricing provisions apply. Those who miss the original deadline may still have an opportunity to file a belated return, but compliance is almost always simpler when the original deadline is met. Despite the Income-tax Act, 2025 coming into force, returns for FY 2025-26 continue to be filed under applicable provisions governing that assessment year.
