How Are Crypto and Digital Assets Taxed in the US, Canada and India?

Crypto tax differs in each country: the United States treats digital assets as property, taxing sales and swaps as capital gains and mining or staking as income; Canada treats activity as capital gains (half taxable) or business income; and India taxes income from transferring virtual digital assets at 30%.

How does crypto tax compare?

How is crypto taxed in the United States?

1. Answer the Form 1040 digital-asset question. Say "Yes" if you received digital assets as a reward, award or payment, or sold, exchanged or disposed of any. Say "No" only if you held, bought with dollars, or moved assets between your own wallets. Paying a fee in crypto counts as a transaction.
2. Report sales and swaps on Form 8949 and Schedule D. Held one year or less is short term. Long-term rates for 2025 are 0% up to $48,350 of taxable income for single filers ($96,700 joint) and 15% up to $533,400 ($600,050 joint).
3. Report staking rewards as income when you gain control of them, on Schedule 1, or Schedule C for a business.
4. Reconcile your records with Form 1099-DA. Custodial brokers report: for 2025 sales it shows gross proceeds, with basis optional; for 2026 sales basis is required for covered assets acquired in custody after 2025. You owe tax even if no form arrives, so track basis wallet by wallet.

Wash-sale treatment of ordinary crypto is unsettled in the sources we reviewed.

Canada: capital gain or business income?

• Classification: the CRA treats crypto activity as business income or capital gains. Selling, swapping crypto for crypto, spending and gifting are disposals. Moving crypto between your own wallets is not.
• Losses and rate: capital losses offset only capital gains (three-year carryback, indefinite carryforward). The inclusion rate stays at one-half; the planned two-thirds was cancelled on March 21, 2025. See capital gains compared and Canada capital gains.
• Foreign currency: individuals exclude the first $200 of net foreign-currency gain or loss a year.
• T1135: required when specified foreign property cost passes $100,000 CAD. The CRA page lists funds held outside Canada but not crypto, and we found no official statement, so ask your Canadian CPA.
• CARF: Budget 2025 defers the Crypto-Asset Reporting Framework to January 1, 2027. Bill C-31 carries it; Royal Assent is unconfirmed as of October 2026.

India: VDA tax and TDS

FY 2025-26 income is returned under the Income-tax Act, 1961, while the 30% rule we read is in section 194 of the Income-tax Act, 2025. Your Chartered Accountant confirms the 1961-Act wording; see also India capital gains for NRIs.

• 30% rate: no deduction except cost of acquisition, and no set-off of losses.
• 1% TDS on VDA consideration (section 194S of the 1961 Act, section 393 of the 2025 Act), skipped under Rs 10,000 a year, or Rs 50,000 for specified individuals and HUFs.
• Reporting: ITR-2 (assessment year 2026-27) has Schedule VDA.
• CARF: India's domestic reporting framework covers calendar 2026 onward, with statements due May 31 of the next year. No firm international exchange date has been found.

Foreign exchanges and reporting overlaps

We state no rule here on whether crypto at a foreign exchange belongs on the FBAR or Form 8938; we decide case by case. Foreign bank accounts are covered in our FBAR guide.

Worked example: one coin sale in three countries

These figures are invented for illustration; the columns are three separate cases.

A single filer in Aurora who held the coin 14 months, with $60,000 of other taxable income, pays 15% on the $5,000 gain. In Canada, half the gain is taxed at marginal rates. In India, 30% of Rs 5 lakh is Rs 1,50,000 before any surcharge or cess, and the 1% TDS of Rs 15,000 is credited against it. Someone with ties to two countries may be taxed by both; see foreign tax credits.

Mistakes and cross-border traps

• Answering "No" after swapping coins, or skipping reporting because no 1099-DA came.
• Treating a Canadian coin-for-coin swap as tax-free.
• Setting an Indian crypto loss against other gains.

What we do

We handle the US side: Form 8949, Schedule D, income reporting and 1099-DA reconciliation. We coordinate with your Canadian CPA and Indian Chartered Accountant, who prepare those returns, so the three agree. We do not give investment advice. See cross-border tax services and more tax questions.

Frequently asked questions

General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.