It happened. The financial year closed, and if you didn’t get your crypto tax affairs in order before midnight on March 31, you’re now in FY 2026–27 looking back at a tax obligation that needs to be addressed — not avoided. The good news: missing the year-end planning window does not mean you’re out of options. It means your options are different now, and some of them are time-sensitive in their own right.
Here is what Indian crypto investors should do in the days and weeks following the March 31 deadline.
First, Understand What You’re Actually Dealing With
India’s Virtual Digital Asset (VDA) taxation framework under Section 115BBH hasn’t changed. Every rupee of profit from selling, swapping, or transferring crypto during FY 2025–26 is taxed at a flat 30% plus 4% cess — an effective rate of 31.2%. Losses from one asset cannot offset gains from another. The only deductible is your original cost of acquisition.
What has changed is your timeline and your leverage. Pre-March 31, you could realise losses, adjust positions, and clear advance tax with minimal penalty. Post-March 31, those moves are closed for FY 2025–26. But the obligation to report and pay still very much exists — and now comes with a ticking clock of its own.
The Advance Tax Problem — And How to Limit the Damage
If your crypto gains during FY 2025–26 created a tax liability exceeding ₹10,000, you were expected to pay advance tax in four instalments, the last of which was due March 15. If you didn’t, interest under Sections 234B and 234C of the Income Tax Act is already accruing.
Section 234B applies when you’ve paid less than 90% of your assessed tax by year-end. Section 234C applies to shortfalls in each instalment. Both charge 1% interest per month on the outstanding amount. The longer you wait to pay, the more interest compounds.
What to do now: Calculate your approximate tax liability for FY 2025–26 as soon as possible and make a self-assessment tax payment via Challan 280 on the Income Tax portal. Paying today won’t erase the interest already accrued, but it stops the clock from running further. Every week of delay is a week of avoidable interest.
Your ITR Filing Deadline Is Still Ahead of You
Missing March 31 is not the same as missing your Income Tax Return deadline. For most individual investors, the ITR filing deadline for FY 2025–26 is July 31, 2026. That window is still open, and filing on time, even if you pay some interest on delayed advance tax, is far better than missing the ITR deadline too.
The ITR-2 and ITR-3 forms include dedicated VDA schedules. You’ll need to report every disposal: date of acquisition, cost of acquisition, date of transfer, and sale consideration. Each transaction is reported individually. This is where clean records pay off or where poor records become expensive.
If your records are incomplete, start reconstructing them now. Download transaction histories from every exchange you’ve used. Cross-reference with your bank statements for INR inflows and outflows. For peer-to-peer or DeFi transactions, gather whatever on-chain evidence exists. The earlier you start, the better your ITR will look, and the lower your audit risk.
What the AIS and Form 26AS Will Tell the Tax Department About You
Here is what many casual investors don’t fully appreciate: the Income Tax Department already has data on you. Indian exchanges are required to report transactions under Section 285BA, and TDS deducted under Section 194S is recorded in your Annual Information Statement (AIS) and Form 26AS automatically.
This means the department can see crypto activity linked to your PAN even before you file. If your ITR doesn’t align with what’s in your AIS, you will receive a notice. Reconciling your own records with your AIS before filing is not optional — it is the foundation of a clean return.
Log in to the Income Tax portal, download your AIS for FY 2025–26, and compare every line item against your exchange records. Discrepancies need to be explained or corrected before submission.
The Belated Return Safety Net
If you also miss the July 31 ITR deadline, all is not lost — but the cost rises. A belated return can be filed under Section 139(4) up to December 31, 2026, with a late filing fee of ₹5,000 (reduced to ₹1,000 if your total income is below ₹5 lakh). You will also lose the ability to carry forward certain losses. Though for crypto, given the existing no-set-off rule, this limitation is less impactful than for equity investors.
The real cost of a belated return is reputational with the tax system: repeated late filings increase your scrutiny profile.
Looking Forward: What to Set Up for FY 2026–27 Starting Today
April 1 is actually the ideal moment to build the habits that prevent this situation from repeating. From today, every crypto transaction in FY 2026–27 should be logged immediately — asset, quantity, price in INR, date, and platform. Several portfolio tracking tools support Indian tax reporting natively and can generate compliant transaction summaries at year-end.
Set a calendar reminder for March 15, 2027 — the final advance tax instalment; and for July 31, 2027, the ITR deadline. If your crypto activity is significant, consider quarterly check-ins with a chartered accountant who specialises in VDA taxation. The regulatory environment is evolving, and professional guidance pays for itself quickly at a 31.2% effective tax rate.
The Bottom Line
Missing March 31 means you’ve lost some planning options, but thankfully not all of them. Pay your outstanding tax liability now to stop interest from growing. Reconstruct your transaction records. Reconcile your AIS. File your ITR by July 31. And use April 1 as the starting point for a disciplined approach to FY 2026–27.
The deadline passed. The obligation didn’t.
This article is for informational purposes only and does not constitute financial or tax advice. Consult a qualified chartered accountant for guidance specific to your situation.
