Crypto Record-Keeping for Indian Investors

Why India demands more than most jurisdictions

In most tax systems, gains and losses net off at year end, so approximate records are often survivable. India does not work that way. Under Section 115BBH each transfer is computed separately, losses cannot be set off, and Schedule VDA requires transaction-level reporting.

That combination means every single disposal needs its own acquisition date, cost of acquisition and consideration. There is no aggregate figure that satisfies the requirement.

What to record for every transaction

• Date and time
• Asset and quantity
• INR value at that moment
• Transaction type — buy, sell, swap, transfer, reward, airdrop
• Platform or wallet, and the counterparty where relevant
• Fees paid, recorded even though they are generally not deductible
• TDS deducted, where applicable
• Transaction ID, order ID or on-chain hash

The transactions people forget

1. Crypto-to-crypto swaps. No rupees moved, so it did not feel like a disposal. It is one.
2. Staking and mining rewards, each of which is a receipt with a date and a value. See staking and mining tax.
3. Airdrops, taxable on receipt at slab rate. See airdrop tax.
4. Spending crypto, including through a card — a disposal like any other.
5. Transfers between your own wallets, not usually taxable but necessary to explain movements.
6. Activity on closed platforms, which is why exports should be taken while you still have access.

Choosing a cost basis method

Section 115BBH does not prescribe a cost-flow assumption. Where you bought the same asset in several lots and sold part of it, you need a method — most commonly FIFO, which is what Indian exchange statements generally use.

Choose one, apply it consistently across years, and keep the records that support it. Switching methods between years to produce a better result is the pattern most likely to attract a challenge.

A workable system

1. Export from every platform quarterly, not annually. Exchanges limit historical access and accounts can be restricted.
2. Keep a single consolidated ledger across all platforms and wallets, since Schedule VDA spans all of them.
3. Reconcile TDS monthly against what exchanges report, so discrepancies are fixed while the year is open.
4. Record on-chain activity as it happens. Reconstructing DeFi interactions from chain data a year later is genuinely difficult.
5. Store exports independently of the platforms themselves.

Why this pays off

Good records turn filing from reconstruction into transcription, and turn a departmental query from a serious problem into a short reply with attachments.

The department already receives Section 194S reporting from Indian exchanges, so it holds data about your transfers. The question at filing is not whether your activity is visible but whether your return matches what is already known.

What a workable ledger looks like

A single spreadsheet, one row per transaction, is sufficient for most individual investors and considerably more reliable than reconstructing from exchange exports later.

Column	Why it is needed
Date and time	Determines the applicable value and the financial year
Type	Buy, sell, swap, transfer, reward, airdrop — each is treated differently
Asset and quantity	Identifies the lot
INR value	The basis for computation
Platform / wallet	Needed to reconcile against statements
Fees	Not deductible, but needed to reconcile amounts
TDS deducted	Reconciled against Form 26AS
Reference	Order ID or transaction hash — the underlying evidence

Reconciling against the AIS

The Annual Information Statement shows what the department already knows about your transactions from Section 194S reporting. Reconciling your ledger against it before filing is the single highest-value step in the process.

Discrepancies fall into three categories: something you missed, something the exchange reported incorrectly, or a timing difference. All three are far easier to resolve while the year is open than after a notice arrives.

Records for DeFi and self-custody

On-chain activity has no statement. The chain is the record, and reconstructing intent from it later is genuinely difficult — a series of approvals, swaps and liquidity operations does not self-describe.

Recording these as they happen, with a one-line note of what you were doing, converts an unreadable transaction history into a usable one. This is the area where a year-end reconstruction most often fails outright.

Related guides

• Crypto tax in India
• Schedule VDA filing
• Crypto tax calculator
• How crypto tax is calculated

Educational content, not tax advice. Confirm your position with a qualified chartered accountant.