Is crypto gifting allowed in India? Key FAQs on tax rules, exemptions, calculations and ITR filing answered

Thinking of gifting Bitcoin, Ethereum or another crypto asset to a family member or friend, but wondering if it is even allowed in India, and how it works?

Pranav Pagaria, Head of Finance & Strategy, CoinDCX, explains the legality of crypto gifting and the key tax and compliance rules investors should keep in mind.

Can crypto be legally gifted in India?

“Yes, crypto can be legally gifted in India,” Pagaria noted. They are recognised as Virtual Digital Assets (VDAs) under the tax framework.

However, he added that it is advisable to maintain a gift deed documenting the transfer. Such records can become important for tax reporting when the recipient eventually sells the crypto.

When is a crypto gift exempt from tax?

Pagaria explained that “under Section 56(2)(x) of the Income Tax Act, 1961 or under Section 92(3) of the Income Tax Act, 2025, gifts received from specified relatives are fully exempt, with no monetary ceiling.”

The specified relatives include:

• Spouse
• Sibling of the taxpayer or the taxpayer’s spouse
• Sibling of either parent
• Lineal ascendants and descendants of the taxpayer or the taxpayer’s spouse, such as parents, children, grandparents and grandchildren
• Spouse of any person listed above

For example, if your mother gifts Bitcoin worth ₹12 lakh to you, no tax arises on receipt, Pagaria noted.

He further added that gifts received on the occasion of marriage, under a will, by inheritance, or in contemplation of the death of the payer/donor remain fully exempt irrespective of amount or the giver’s relationship with the recipient.

The recipient is the person who receives the crypto gift, while the donor or giver is the person who gives or transfers the gift.

When is a crypto gift taxed?

For gifts from non-relatives, Pagaria said the rules are different. If the aggregate value of such gifts exceeds ₹50,000 in a financial year, the entire amount becomes taxable, not merely the portion above ₹50,000. It is taxed as “Income from Other Sources” at the recipient’s applicable slab rate.

For example, if a colleague gifts Ethereum worth ₹75,000, the entire ₹75,000 is added to the recipient’s taxable income.

For gifts between an Indian resident and an NRI, he noted that the transfer also has to comply with FEMA rules.

How is tax calculated when gifted crypto is sold?

For an earlier tax-exempt gift, Pagaria explained that when the recipient later sells the gifted crypto, the donor’s original purchase price becomes the recipient’s cost of acquisition, rather than the crypto’s fair market value on the date of the gift.

He explained the same with an example.

• Your father buys 0.1 BTC in 2019 for ₹15 lakh.
• He gifts it to you in 2024 when its value was ₹45 lakh.
• You sell it in 2026 for ₹70 lakh.
• Taxable gain = ₹70 lakh − ₹15 lakh = ₹55 lakh.

At the 30% VDA tax rate, your tax liability comes to ₹16.5 lakh, excluding surcharge and cess. The 1% TDS deducted by the buyer can be claimed as a credit against your tax liability.

He highlighted that “the original cost of acquisition becomes critical” when gifted crypto is sold. Therefore, the recipient should keep the donor’s original purchase records, including exchange statements, invoices, wallet history, and gift transaction details.

“For a taxable gift received from a non-relative, the fair market value on the date of the gift becomes the cost of acquisition,” Pagaria added.

So, if a friend gifted the crypto in the above example, the ₹45 lakh value on the gifting date would be treated as the cost, making the taxable gain ₹25 lakh ( ₹70 lakh − ₹45 lakh).

How should crypto gifts be reported in the ITR?

He mentioned that “India’s ITR framework requires transaction-wise reporting of VDAs. If the recipient later sells the gifted crypto, the transaction should be disclosed under Schedule VDA with the relevant acquisition and transfer details.”

Both parties should keep:

• Exchange statements and transaction records
• Wallet addresses and transaction hashes
• Valuation of the crypto on the gifting date
• Gift deed and other documents establishing the nature of the transfer

He further added that if the gifted crypto is held on a foreign platform or wallet, the taxpayer must disclose it under Schedule FA (Foreign Assets) in the ITR.

Disclaimer: This is only for informational and educational purposes. Please consult a qualified expert for the latest laws and regulations.