What investors ask first.

No. A Crypto Index is a curated basket of digital assets, weighted on a methodology and rebalanced on a schedule. You hold the basket, not the individual coins, and you do not need to understand wallets or blockchains to own one.

Most crypto apps are built for constant activity. Qatobit is built for holding. The suite is designed around long-term portfolio construction: four QSI Crypto Indices designed and rebalanced by Qatobit, Crypto SIP, and Qai. The methodology behind each index is published, and Proof of Reserves is available at any time.

Directly to and from your linked Indian bank account, by bank transfer (NEFT, RTGS, or IMPS). ₹200 minimum on either side, with no deposit or withdrawal fee.

Yes. KYC is mandatory on every regulated crypto platform in India. You need a PAN card, an Aadhaar number, and a bank account in your name. The digital KYC flow on Qatobit typically clears in minutes. Without KYC, you cannot deposit INR or make any crypto purchase.

The full process from sign-up to first purchase is typically under 15 minutes if KYC verification clears on the first attempt. The Bitcoin purchase itself takes seconds once the INR deposit is in your account. INR deposits via bank transfer typically reflect within minutes.

The safest path is a platform that meets all five selection criteria: a published custody architecture (Live Proof of Reserves is the highest standard), a current third-party security audit (CERT-In or equivalent), a transparent fee structure, Schedule VDA-ready tax reporting, and the platform's compliance registration under India's PMLA framework. After the purchase, the long-term security can be improved further by moving the Bitcoin to a hardware wallet you control (self-custody) for the portion of the position you do not intend to transact. The combined setup (regulated platform for the operational layer plus self-custody for long-term storage) is the structurally strongest configuration.

Apply the five criteria: custody architecture (Live Proof of Reserves preferred), operational security (CERT-In audit), fee transparency (published structure), tax reporting (automated TDS and Schedule VDA-compatible exports), and the platform's compliance registration. A platform that scores on all five is operationally sound and provides the post-purchase support the investor needs across the holding period. A platform that misses one or more of these criteria is structurally weaker, and the investor should evaluate whether the missing capabilities matter for their specific use case.

The flagship Crypto Index. Five assets: BTC, ETH, Solana, Gold, and a stable reserve. Rebalanced monthly. The Solana allocation is the mechanical advantage that separates Growth from Core, and the Gold allocation buffers bear markets. Crypto investments carry market risk, and past performance does not guarantee future results.

The conservative index. Four assets: Bitcoin, Ethereum, Gold, and a stable reserve. Rebalanced monthly. The Gold allocation acts as a structural buffer that absorbed much of the 2022 bear market through counter-cyclical rebalancing.

The full-conviction index. Three assets: BTC, ETH, and Solana, with no hedge. Rebalanced monthly. Built for a multi-year horizon and a deliberate decision to maximise crypto exposure.

A Qatobit-designed index of eight global companies at the intersection of technology, digital finance, and innovation. Rebalanced monthly. It is structured differently from a mutual fund.

Every QSI index resets to its target weights on a fixed monthly schedule, trimming what has grown and topping up what has lagged, so the index holds its intended construction instead of drifting with the market.

A Crypto Index is a curated basket of digital assets, selected against defined eligibility criteria, weighted by a documented scheme, and rebalanced on a set cadence. You hold proportional exposure to every asset in the basket. The methodology handles the allocation logic. You own the methodology, not the coin-picking decision. The basket's construction, weighting, and schedule define the product.

Holding individual coins ties your performance to the specific behaviour of each asset, including its technical roadmap, community governance, and regulatory standing in any jurisdiction. A Crypto Index holds a basket weighted by methodology. The single-coin position and the index allocation are structurally different instruments. The index does not remove crypto risk. It removes the requirement to pick the right crypto asset within the class.

Selection starts with eligibility: a market-cap minimum, a daily volume liquidity floor, and a listing requirement. Assets that pass all three enter the eligible universe. Free-float adjustment then strips out developer-held and locked supply before weighting. The weighting scheme, one of market-cap weighted, equal-weight, square-root weighted, or capped market-cap weighted, determines how much of the basket each eligible asset represents. Stablecoins and wrapped tokens are excluded by design.

Crypto Indices are a separate product category in India. The regulatory structure applicable to Crypto Indices is different from the structure applicable to SEBI-supervised investment instruments. These are different product categories with different frameworks. Understanding this distinction is part of making an informed allocation decision. QSI GEQ8 specifically sits outside SEBI regulation, which is stated in its product documentation.

No construction removes the risk of the asset class falling. A QSI index still falls when the broader crypto market falls, buffer included. What the construction manages is concentration risk, the risk tied to one asset behaving badly. Market risk, the risk tied to the asset class as a whole, stays with the investor.

Reviews can happen off-cycle when something breaks: an asset failing one of the standing screens, a structural break in its liquidity, or a security failure in the holding itself. Price movement on its own is not one of those triggers, so a fall waits for the next scheduled date. Any change that comes out of an off-cycle review is versioned and dated like the rest.

It can. In a falling month the rule more often runs the other way, buying back into Bitcoin and Ethereum with capital sourced from Gold and the stable reserve. In a rising month it trims the crypto sleeve and tops the buffer back up. Which way a given month goes depends on which part of the basket drifted furthest from its target weight.

Five elements form the core: eligibility criteria for assets, the weighting scheme, the rebalancing cadence and trigger, the full cost structure, and operational transparency including Live Proof of Reserves. A serious methodology answers all five quantitatively, in written form, available before any purchase commitment. A product that cannot be evaluated on all five points has incomplete documentation.

Read the methodology document and look for quantitative thresholds, mechanical triggers, and stated rules. Phrases like "manager discretion", "proprietary considerations", or "subject to review" indicate discretionary management rather than rule-based indexing. A genuine index reduces or eliminates the manager's day-to-day decisions; a discretionary product retains them. Both can be legitimate, but they are different categories with different risk profiles.

The weighting scheme determines what you actually own. A market-cap weighted basket of seven crypto assets typically concentrates over 60 percent in Bitcoin and Ethereum combined, giving you mostly two-asset exposure. A square-root weighted basket of the same seven distributes weight more evenly across constituents. The two products hold the same assets but produce different return and risk profiles. The weighting choice is the most consequential design decision after constituent selection.

A Crypto Index without a public, downloadable methodology document is not a candidate for allocation. The methodology is the product. If the document is unavailable or held back behind sales conversations, treat the product as opaque. Opacity is itself a finding that fails point 5 of the framework, regardless of how the other four points look. Allocate only to products whose methodology you can read in full before purchase.

Growth carries Core's same four holdings plus a Solana allocation, aimed at an investor who wants Core's buffer and a documented upside lever. Core alone suits an investor who wants the buffer without exposure to Solana specifically. Neither construction is designed to outrank the other.

GEQ8 holds eight global companies across a Platform, Digital Finance, and Innovation sleeve, and none of them is a coin. It shares the monthly-rebalance discipline of the three crypto indexes and is a distinct product, priced at 0.35% per rebalance with no annual management fee.

Yes. Each index carries its own ₹2,000 minimum and can be entered independently, by lump sum or Crypto SIP. Combining two, Core for stability and VRION for conviction for instance, is a two-part decision that the range is built to allow.

All four rebalance monthly. GEQ8 also carries a quarterly composition review, since its constituent companies and their weights are expected to shift as the underlying businesses do, while Core, Growth, and VRION hold fixed asset lists.

QSI Core is four-asset with the Gold buffer, designed as a conservative crypto allocation. QSI Growth is five-asset, adding Solana to the QSI Core construction for additional upside. QSI VRION is three-asset, holding only Bitcoin, Ethereum, and Solana, with no buffer or stable reserve, designed for full crypto conviction. QSI GEQ8 is a Qatobit-designed Crypto Index of 8 global companies at the intersection of technology, digital finance, and innovation, sitting outside SEBI regulation. Each index serves a different point on the risk and conviction spectrum.

Solana is the growth lever in the construction. Solana's network has demonstrated specific growth characteristics in throughput, developer activity, and use-case adoption that operate independently of Bitcoin and Ethereum's growth vectors. Including Solana converts the crypto core from two assets to three and adds an upside exposure at a different risk-return point. The volatility profile of Solana is typically higher than Bitcoin and Ethereum; the construction takes on more volatility for more upside potential.

QSI GEQ8 holds 8 global companies across three sleeves: Platform (Apple, Amazon, Alphabet, Meta, NVIDIA), Digital finance (Coinbase, Robinhood Markets), and Innovation (Tesla). The exact weights drift between monthly rebalances and are governed by the methodology document; the current composition is available on the QSI GEQ8 product page.

A crypto basket is a structured grouping of crypto assets: any platform-bundled collection that can be bought in a single transaction. A Crypto Index is a basket with five additional features: documented methodology, defined constituents, mechanical rebalancing, transparent fees, and accountable design. The five features together produce a disciplined construction that the investor can understand, hold against, and evaluate. A basket without those features is a curated grouping that may shift without documented rules.

Not exactly. Every Crypto Index is a basket (because an index is a structured grouping of assets), but not every basket is a Crypto Index. The terms are often used interchangeably in casual conversation and in some marketing copy, but the structural distinction matters. An index commits to a documented construction; a generic basket may not. The investor should look at the five features to determine which category a product falls into.

A "real" Crypto Index has all five features: documented methodology (the rules are written down and published), defined constituents (the asset list is governed by the methodology), mechanical rebalancing (the rebalances run by rule, not discretion), transparent fees (the fee structure is clearly disclosed), and accountable design (a named methodology owner is responsible for the construction and updates). A product missing one or more of these features is somewhere between a basket and an index; the investor should know which features are present.

A Crypto Index is structurally easier to evaluate and hold against than a generic crypto basket. For most investors with a long-horizon allocation thesis, an index is the more defensible choice because the documented construction gives the investor the articulation they need to hold through difficult periods. A generic basket may be acceptable for a small, tactical allocation, but is structurally weaker as a long-horizon holding because the investor cannot evaluate the construction or anticipate its behaviour through market regime changes.

Yes, at any time, with no fee. You can also change the amount or the cadence on a running SIP, or stop it entirely.

No. A Crypto SIP is an entry-price-smoothing mechanism, not a return-generating mechanism. The returns are produced by the underlying asset, which can rise or fall over any holding period. The cadence reduces the impact of any single entry price on the overall cost basis, which is structurally helpful for volatile assets but does not eliminate the possibility of loss.

Mechanically, both work the same way: fixed INR, fixed cadence, automatic buy at the prevailing price. The difference is the asset purchased. A Crypto SIP into Bitcoin builds a single-asset position over time. A Crypto SIP into a Crypto Index builds a diversified basket position. The minimum amount for a Crypto Index SIP is ₹2,000 per cadence; the fee structure uses the basket rate of 0.35 percent instead of the single-asset rate of 0.4 percent.

No tax applies on each cadence buy. The buys accumulate at their respective cost bases. Tax applies when you eventually sell the accumulated holding, at the standard VDA rate of 30 percent flat plus 4 percent cess on the realised gain under Section 115BBH. The cost basis is the average cost across all the SIP buys, weighted by the quantity acquired in each. The platform tracks this automatically and provides the cost-basis figure for tax-return purposes at year-end.

The SIP runs on the scheduled cadence regardless of market direction. When prices are lower, the same rupee amount buys more units, which is the cost-averaging effect the SIP is designed to produce. The position value reflects the market price; when the market falls, the position value falls with it, partially offset by the additional units acquired at lower prices. The discipline of the SIP is that it does not respond to short-term market movement; it executes on the calendar.

Yes, mechanically. Dollar cost averaging is the term used in US markets for the same approach: a fixed amount of the local currency, invested on a regular cadence. Rupee cost averaging is the same concept applied with INR. The mathematical effect is identical: the harmonic mean of prices weighted by cadence sits below the arithmetic mean of the same prices, producing a lower average cost basis than a fixed-quantity or single-shot approach.

Weekly cadence captures the most intra-period price variation and produces the largest cost-basis-smoothing effect, because the cadence buys at more distinct prices. Monthly cadence is administratively simpler and matches typical income cycles. For most retail investors, monthly is sufficient to capture the bulk of the effect, especially in highly volatile assets like crypto. Biweekly sits between the two. The minimums on Qatobit are ₹500 for weekly or biweekly into a single asset, and ₹2,000 for monthly or for any Crypto Index SIP.

Larger. The cost-basis-smoothing effect depends on the variance of prices across the cadences. Higher variance means a wider gap between the arithmetic mean and the harmonic mean. Crypto's volatility, which runs multiples of equity volatility, amplifies the effect significantly compared to traditional asset classes. The mechanic is structurally well-matched to crypto for exactly this reason.

Most retail investors cannot time crypto markets in any sustained way. Crypto's volatility (annualized in the 50 to 80 percent range historically, multiples of equity) produces a price environment where ordinary noise is much larger relative to any timing signal. Combined with the behavioural biases that operate against retail timing decisions (recency bias, loss aversion, action bias), the practical result is that timing attempts produce worse outcomes than a cadenced approach over the same period. The exception is a small number of professional traders with risk management discipline; this is not the retail investor case.

In trending markets, lumpsum mathematically outperforms because more capital is exposed earlier. In volatile markets with periodic deep drawdowns, SIP often outperforms because cadenced buying accumulates more units during drawdowns. Crypto sits in the latter category. For an investor with a lump available and conviction in the current market position, a hybrid approach (deploy a portion as lumpsum, run the rest as SIP) preserves directional exposure while reducing timing risk on the remainder. The choice depends on conviction and tolerance for being wrong.

The framing of the question is the problem. The investor able to identify the best time to buy in advance is rare; the investor able to identify it consistently over multiple cycles is rarer still. The practical answer for most retail investors is to remove the question from the buying process by running a cadenced SIP. The cadence buys across the price range over the SIP period, which is what produces a smoothed cost basis without requiring the investor to be right about any individual buy date.

A recurring crypto investment invests a fixed rupee amount into a crypto asset or a Crypto Index. It happens automatically on a scheduled cadence (weekly, biweekly, or monthly). The cadence executes regardless of market conditions, and the investor's cost basis is the average price across all the cadence buys. On Qatobit, the setup supports two product variants: recurring auto-buy of a single asset and Crypto SIP into a Crypto Index (QSI Core, QSI Growth, QSI VRION, or QSI GEQ8).

Yes. On Qatobit, you can set up a recurring auto-buy of Bitcoin (or any supported asset) with a cadence of weekly, biweekly, or monthly. The minimum is ₹500 for weekly or biweekly cadences, and ₹2,000 for monthly cadences. The cadence executes through the linked bank account's standing instruction. Bitcoin is credited to the platform account on each cadence execution. The recurring auto-buy is one of two product variants. The other is a Crypto SIP into a Crypto Index, which spreads the cadence buy across multiple assets per the index methodology.

Allocate to, redeem from, or rebalance a Crypto Index, 0.35%. There is no annual management fee. INR deposits and withdrawals are free, with a ₹200 minimum on either side. The applicable fee is shown before you confirm any transaction.

Each Crypto Index starts at ₹2,000. A Crypto SIP starts at ₹500 per cadence for weekly or biweekly, or ₹2,000 for monthly. A SIP into a Crypto Index starts at ₹2,000 per cadence. Deposits and withdrawals start at ₹200.

None. All four QSI Crypto Indices, Core, Growth, VRION, and GEQ8, carry the same structure: the only fee is 0.35%, charged per basket buy, sell, or rebalance.

The fee on a single-asset Quick Buy of Bitcoin is 0.4% of the INR amount, displayed before you confirm the transaction. There is no INR deposit or withdrawal fee. The minimum deposit and withdrawal are ₹200 each. For Crypto Index purchases, the basket fee is 0.35%.

Qatobit publishes Live Proof of Reserves, available at any time, so you can see that your holdings are accounted for without waiting on a request or a quarterly cycle. User funds are kept separate from operational funds, and user assets are insured. One thing to be clear about: Proof of Reserves and insurance protect the assets in custody. They do not protect against the price of an asset falling, which is market risk and stays with you.

A live, verifiable record of the crypto Qatobit holds on behalf of users. It is the crypto equivalent of an audit, except it is continuously current rather than periodic, and it is available to you at any time.

For long-term holding of a meaningful position, yes. Hardware wallet (self-custody) shifts the position out of platform-level operational risk and gives the user full control of the keys. The trade-off is operational complexity: the user manages the seed phrase, backups, and recovery procedures. For investors who plan to trade actively or to use the position within structured baskets like QSI Core or QSI Growth, platform custody is operationally simpler. Many investors hold both: platform custody for the active position, self-custody for the long-term storage portion.

Qatobit's in-platform AI companion. It holds voice-to-voice conversation in vernacular Indian languages as well as text, and gives you market data, analysis, and methodology explainers scoped to your holdings and the indices on the platform. Qai requires sign-in. It is informational and educational, and does not give personalised investment advice.

Crypto gains in India are taxed at a flat 30 percent under Section 115BBH of the Income Tax Act, plus a 4 percent health and education cess, taking the effective rate to 31.2 percent. Surcharge applies on top for taxpayers whose total income crosses the surcharge thresholds (10 percent surcharge above ₹50 lakh total income, with higher brackets at higher income levels). The 30 percent rate is flat and does not change with holding period.

No. Losses on the transfer of a virtual digital asset cannot be set off against gains on any other virtual digital asset, against any other head of income, or carried forward to future years. The traditional capital-gains set-off and carry-forward framework under the Income Tax Act does not extend to virtual digital assets. Each gain is taxed standalone at 30 percent plus cess.

Schedule VDA is the section of the income tax return (ITR-2 or ITR-3) where virtual digital asset transactions are reported. For each transaction, you report the date of acquisition, date of transfer, cost of acquisition, sale consideration, and income from the transfer. The reporting is transaction-level. Regulated platforms typically provide downloadable transaction histories that contain the required fields. Reconcile your records against the Annual Information Statement before filing.

Regulated platforms in India deduct the 1 percent TDS under Section 194S automatically at the time of transfer, before crediting INR (or crypto) to the seller's account. The deduction is reported by the platform against the seller's PAN and reflects in Form 26AS and the Annual Information Statement on the income tax department's e-filing portal. For peer-to-peer transactions outside regulated platforms, the buyer is responsible for the deduction.

Effective April 2026, non-reporting of virtual digital asset holdings attracts a penalty of ₹200 per day of default, and inaccurate reporting attracts a penalty of ₹50,000. These operate in addition to the existing penalty framework under Sections 270A and 271 for under-reporting or misreporting of income. The Annual Information Statement contains TDS data from deductors; mismatches with Schedule VDA reporting trigger automated queries from the income tax department.

No. TDS at 1 percent under Section 194S is a withholding mechanism, not a separate tax. The TDS is credited against your final tax liability at year-end. If the TDS already deducted exceeds your year-end liability, the excess is refunded. The total tax remains 30 percent plus cess, and surcharge if applicable. TDS changes the timing of the tax payment, not the amount.

Yes. A trade from Bitcoin to Ethereum is treated as a transfer of the Bitcoin position at the prevailing fair market value. The gain is computed as the fair market value of the Ethereum received minus the cost of acquisition of the Bitcoin, and taxed at 30 percent under Section 115BBH. Crypto-to-crypto trades are taxable events even though no INR changes hands.

Airdrops and staking rewards are taxable on receipt at fair market value, as income from other sources at the recipient's applicable slab rate. The fair market value at receipt becomes the cost basis for the eventual transfer of the token. The transfer is then taxed at 30 percent under Section 115BBH on the difference between the sale value and the cost basis. Two distinct tax events apply to the same token across its lifecycle.

The TDS rate under Section 194S of the Income Tax Act is 1 percent of the consideration (the gross transaction value), deducted by the payer at the time of credit or payment, whichever is earlier. The rate is flat and does not include cess or surcharge. The rate applies to transfers of virtual digital assets above the threshold of ₹50,000 aggregate per financial year for specified persons (most individuals) or ₹10,000 for other persons.

Yes. A crypto-to-crypto trade (such as Bitcoin to Ethereum) is treated as a transfer of the asset disposed of, at the prevailing fair market value. TDS at 1 percent applies on the fair market value of the consideration. The mechanism is handled by the platform facilitating the trade. No INR changes hands in the trade, but the TDS amount is still computed and deposited.

The TDS is reflected in Form 26AS and the Annual Information Statement (AIS) on the income tax department's e-filing portal. The data flows from the deductor's quarterly TDS return into your tax records, usually within a few days of the deductor's filing. Reconcile your platform's transaction history against Form 26AS at quarterly intervals to confirm the reporting matches. At return-filing time, the TDS credit is claimed in Schedule VDA of ITR-2 or ITR-3.

No. Section 115BBH applies a flat 30 percent tax on gains from the transfer of virtual digital assets, plus 4 percent cess. The rate is statutory and is not reduced by holding period, income bracket, classification, or transfer between persons. What can be optimized is record-keeping, TDS credit recovery, and Schedule VDA filing accuracy, so that the rate is paid on the actual gain rather than on a larger amount due to disorganization.

Gifting virtual digital assets between specified relatives is permitted without immediate tax under the Income Tax Act, but it does not reduce the future tax on the asset. The cost basis carries to the recipient, and when the recipient transfers the asset, the 30 percent rate applies on the gain against the original cost basis. For spouses specifically, the clubbing provisions under Section 64 may pull the gain back to the transferor for tax purposes.

No. Section 115BBH permits only the cost of acquisition as a deduction. Platform fees that formed part of the acquisition cost are included in the cost basis. Sale-side fees, gas fees, network fees, advisory costs, software subscriptions, and infrastructure costs are not deductible from the gain. The framework is restrictive in a way that other asset classes are not.

A Virtual Digital Asset is defined under Section 2(47A) of the Income Tax Act, inserted by the Finance Act 2022 and effective from 1 April 2022. The definition has three legs: (a) cryptographically generated or otherwise produced digital tokens that represent value, function as a store of value or unit of account, and can be transferred electronically (covers cryptocurrencies); (b) non-fungible tokens and similar tokens; and (c) any other digital asset notified by the Central Government. Indian currency and foreign currency are explicitly outside the scope.

VDAs are taxed under Section 115BBH, which is a separate special-rate regime that sits outside the five regular heads of income (salaries, house property, business or profession, capital gains, other sources). The rate is 30 percent flat plus 4 percent cess, with surcharge applicable above ₹50 lakhs total income. The only deduction allowed is cost of acquisition. No holding-period benefit, no loss set-off across VDAs or other heads, no loss carry-forward.

Yes, by notification S.O. 2959(E) dated 30 June 2022. Non-fungible tokens fall within the VDA definition and are taxed under Section 115BBH. The narrow exception is NFTs whose transfer effects a legally enforceable transfer of ownership of an underlying tangible asset; such NFTs are taxed under the regime governing the underlying asset rather than under the VDA framework. Most NFTs an investor will encounter on a regulated platform are within the VDA scope.

No. Notification S.O. 2958(E) dated 30 June 2022 specifically excludes gift cards or vouchers, mileage points or reward points or loyalty card points, and subscriptions to websites, platforms, or applications from the VDA definition. The reasoning is that these instruments operate as redemption mechanisms or access credits rather than as transferable stores of value, and they fall outside the structural design of Section 115BBH.

The definition was inserted into the Income Tax Act by the Finance Act 2022 and became effective from 1 April 2022. The 30 percent rate under Section 115BBH applied from the same date. The 1 percent TDS under Section 194S, which is the parallel collection mechanism, became effective from 1 July 2022. The framework has been continued in subsequent budgets, including the 2026 Budget, which added reporting penalties but did not change the definition or the rate.

Section 115BBH is the provision in the Income Tax Act that taxes income from the transfer of virtual digital assets. The rate is a flat 30 percent, plus 4 percent health and education cess. It was inserted by the Finance Act 2022 and became effective from 1 April 2022. The section applies the rate to gains computed as sale consideration minus cost of acquisition; no other deductions are allowed. The section has been continued without change in subsequent budgets, including the 2026 Budget.

For an investor with total income below ₹50 lakhs, the effective rate is 31.2 percent (30 percent plus 4 percent cess on the 30 percent). For total income between ₹50 lakhs and ₹1 crore, the surcharge of 10 percent on the tax pushes the effective rate to approximately 34.32 percent. Between ₹1 crore and ₹2 crores, the surcharge of 15 percent pushes the effective rate to approximately 35.88 percent. Higher income tiers face higher effective rates per the surcharge tables in force for the assessment year.

No. A transfer between two accounts you control is not a transfer for tax purposes. This includes a transfer between a platform account and a self-custody wallet, or between two platform accounts held in your own name. Beneficial ownership has not changed. The cost basis carries from one location to the other. The Section 115BBH transfer event occurs when there is a change in beneficial ownership through a sale, swap, payment, or other transfer for consideration.

No. Inheriting crypto is not a taxable event for the heir. The heir steps into the predecessor's tax position: the cost basis of the predecessor carries to the heir. When the heir later transfers the inherited crypto, Section 115BBH applies on the gain over that carried cost basis. The inheritance itself is not a transfer event under the Income Tax Act. The heir's later activity with the inherited crypto is taxed in the normal way.

Purchases of Bitcoin (acquisitions) are not taxable events themselves under Section 115BBH; the tax applies at transfer (sale, swap, payment in Bitcoin). However, the cost basis established at the purchase is what gets used at the eventual transfer, so accurate purchase records are essential. The Schedule VDA on ITR-2 or ITR-3 requires per-transaction reporting at the transfer events; the purchases provide the cost-basis data for these reports. Budget 2026 added a ₹200/day penalty for non-reporting of VDA holdings and ₹50,000 for inaccurate reporting, so per-transaction recordkeeping is operationally important.