Staking is increasingly popular among Indian crypto users — predictable yields of 4-8% on ETH, SOL, ATOM and others. The tax treatment is doubly stacked, and it's easy to miscalculate.
Receipt of staking rewards
When you receive staking rewards, the rupee-equivalent value is taxable as 'income from other sources' at your slab rate. Date of receipt = the date the reward credits to your wallet.
If you stake on an exchange (Binance Earn, Coinbase Earn), exchange provides reward history. If on-chain, you reconstruct from the protocol.
Subsequent sale of staked tokens
When you eventually sell the rewards you received: cost of acquisition = the rupee-value at receipt (already taxed as income). Sale price = whatever you got. Difference = taxed at 30% under 115BBH.
If the token went up between receipt and sale, that delta is taxed at 30%. If down, the loss can't offset anything — no tax benefit.
Worked example
Receive 0.1 ETH staking reward when ETH = ₹2,80,000. Income added to slab: ₹28,000 (taxed at slab — let's say 30% slab = ₹8,400 tax).
Six months later sell that 0.1 ETH at ₹3,00,000 = ₹30,000. Cost basis ₹28,000. Gain ₹2,000. 30% × ₹2,000 = ₹600 tax under 115BBH.
Total tax on the original 0.1 ETH staking reward: ₹9,000.
Key takeaways
- Staking = double-stacked tax: slab rate at receipt, 30% at sale.
- Cost basis at sale = rupee-value at receipt (already taxed).
- Gains between receipt and sale taxed at 30%; losses can't offset.
- Track reward dates and rupee-values precisely; missing this = audit risk.
