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# ITR 2026: Invested in Bitcoin or crypto? Here’s whether to file ITR-2 or ITR-3
- URL: https://clink.ghost.io/itr-2026-invested-in-bitcoin-or-crypto-heres-whether-to-file-itr-2-or-itr-3/
- Published: 2026-11-01T18:00:13.000Z
- Updated: 2026-11-01T18:00:13.000Z
- Author: Vimal Chander Joshi

Did you invest in Bitcoins, Ethereum, Tether or any other cryptocurrency in FY 2025-26 to earn capital gain during the financial year? If that is the case, then you are supposed to declare your crypto income in the ‘Schedule VDA’ of the income tax return (ITR) form.  
However, it is important that you file your tax return in the correct ITR form.  
The VDA schedule is missing in ITR-1, which means you can file your return either in ITR-2 (for salaried individuals) or ITR-3 (for business persons).

Where to declare crypto income?  
Income earned from the sale of cryptocurrencies should be declared in the Virtual Digital Asset (VDA) schedule. In the income tax (I-T) parlance, cryptocurrencies are referred to as VDAs.

“It is vital to remember that crypto income is taxable at a flat 30%, the losses can not be set off against gains, and 1% TDS is deducted at the time of carrying out the transaction. The TDS amount can be cross-verified through AIS/TIS,” says CA Chirag Chauhan, founder of CA Chauhan & Company, a Mumbai-based firm.

Also Read | Bitcoin slips under $65K as two global events rattle crypto investors  
Which income tax return (ITR) form to choose?  
Essentially, taxpayers are supposed to choose between ITR-2 and ITR-3 based on their source of income. If the taxpayer has income from salary, he needs to file a return in ITR-2; if the main source of income is from business or profession, ITR-3 needs to be used.

“Crypto income alone does not determine whether a taxpayer should file ITR-2 or ITR-3\. The deciding factor is the overall nature of income. If crypto is held as an investment and the taxpayer has only salary, house property, or other non-business income, ITR-2 may be applicable. However, if the taxpayer has business or professional income, such as intraday trading, F&O trading, or professional receipts, then ITR-3 must be filed, even if the crypto transactions are merely investments. Similarly, where crypto activities themselves constitute a business, the income should be reported in ITR-3,” says CA Pratibha Goyal, co-founder of PD Gupta & Company, a Delhi-based CA firm.