Pure holding of crypto isn't a taxable event in India. But that doesn't mean you can ignore it on your return — disclosure rules are evolving fast.
No tax on holding
Section 115BBH taxes 'transfer' of VDAs — sale, swap, gift, payment. Buying USDT and parking it in your wallet is not a transfer. No event, no tax.
This is the same logic as holding gold or shares: only on disposal does the gain crystallise.
But you may still need to disclose
Schedule VDA only triggers if you have transfers in the year. If you only bought and held, the schedule stays empty.
However, large holdings on foreign exchanges arguably fall under Schedule FA (Foreign Assets) disclosure obligations for residents. The Income Tax Department's position has been ambiguous, but the safe move for any holding above ₹20 lakh on a foreign exchange is to disclose under Schedule FA.
When TDS-only filings make sense
If you bought USDT mid-year and the platform deducted 1% TDS, you'll see it in 26AS. To recover that TDS as a refund, you must file ITR even if you didn't transfer afterwards.
Key takeaways
- Pure holding = no 115BBH tax event.
- Large foreign-exchange holdings may fall under Schedule FA disclosure.
- File ITR even on hold-only years if TDS was deducted, to claim the refund.
