What determines crypto SIP returns?

Why can't a crypto SIP just tell you its return?

A crypto SIP doesn't hold a single price the way a mutual fund unit holds a NAV history. It holds units bought at a different price on every cadence date. There's no one return figure sitting anywhere until you pick an exit date and work it out yourself. More than 57 lakh Indians started a crypto SIP in 2025. Most "began with just Rs 100 per month," and never ran that arithmetic themselves.

How do the three inputs combine?

All three run at the same time. One sits entirely outside your control. Another is arithmetic you can run before you invest a rupee. The last is a fixed rate applied to whatever the first two produce.

1. The price path you do not control

The price path is whatever the market does between your first cadence and the day you sell. Qatobit does not set it, predict it, or smooth it. For a single asset, it's that asset's own price. For a Crypto Index, it's the combined movement of every holding inside it, weighted the way what a crypto index actually holds describes.

Most SIP explainers skip this input, because there's nothing mechanical to say about it.

2. The cadence math you can calculate in advance

Cadence decides how many units you end up owning at each price. The same fixed rupee amount buys more units when the price is low and fewer when it is high. Your average cost therefore sits below the plain average of the prices you bought at, a mechanism explained cadence by cadence here.

The fee comes out of this same step. A basket buy inside a Crypto Index costs 0.35 percent of the transaction amount, taken from the rupee amount before it converts to units. That rate never changes cadence to cadence, so it's the one cost you can price before you start.

3. The tax that comes out at the end

Tax arrives once, on the day you sell the index or the asset itself. Nothing is taxed on the way in, and nothing is taxed on the monthly rebalance inside a Crypto Index. Section 115BBH taxes that gain at a flat 30 percent. A 4 percent cess brings it to 31.2 percent effective, the same rate that applies to any other crypto sale in India.

A separate 1 percent is withheld at the point of sale under Section 194S once your transfers cross the threshold for the year. That withheld amount is a credit against the 31.2 percent due at filing.

A gain on one holding and a loss on another, in the same year, do not net against each other. The loss rule that costs more than the missing deduction can matter more than any single rate in this section.

Two hypothetical paths to the same ending price

Take two Crypto SIPs, ₹6,000 a month for six months, into the same index, starting and ending at the same unit price: ₹1,000 to ₹1,250. What happens in between is where they differ.

Path A rises in a straight line: ₹1,000, ₹1,050, ₹1,100, ₹1,150, ₹1,200, ₹1,250. Path B gets there the choppy way: ₹1,000, ₹800, ₹700, ₹900, ₹1,100, ₹1,250. The 0.35 percent fee is charged on the contribution amount, so both pay identical fees, ₹126 across the six cadences, and invest an identical ₹35,874 net.

Path A ends with about 32.1 units, an average cost near ₹1,118. Path B ends with about 38.9 units, an average cost near ₹923. Those lower prices along the way leave Path B holding almost 7 more units on the same money. The harmonic-mean arithmetic behind this runs the same way for every SIP. Only the prices it operates on change the outcome.

Sell both at ₹1,250 and the gap compounds. Path A's gain is roughly ₹4,220, taxed near ₹1,316. Path B's gain is roughly ₹12,700, taxed near ₹3,960, about three times Path A's on either count. The contribution, the fee, and the exit price were identical throughout. Only the path in between decided the rest, and these two paths are hypothetical, chosen to isolate exactly that.

What should this change about how you judge a SIP?

Stop asking what a SIP "returned" as if it were one number belonging to the product. The price path that produced someone else's return will never repeat for you, so their number tells you nothing about yours.

What you can judge in advance is the part that never changes: the fee rate on every buy, and the tax rate on whatever gain eventually shows up. Run those two against your own contribution amount before you commit to a cadence, and you've priced the only two inputs that hold still. The bigger question, how much of your portfolio to put in that path at all, comes before any of this.

Frequently asked questions

Does investing a larger amount in a crypto SIP produce a better return?

No. A bigger amount scales the rupee outcome. The price path, the fee rate, and the tax rate stay the same whether the cadence amount is ₹500 or ₹50,000.

Is the 0.35 percent fee charged on my full balance every month?

It applies only to the transaction amount each time a basket is bought, sold, or rebalanced. There is no separate annual fee charged on the balance itself.

Does an internal monthly rebalance inside a Crypto Index trigger tax?

No. Tax applies only when you sell the index or the asset. The index's internal monthly rebalance is a separate event, and nothing is taxed until you exit the position.

Can a loss on one crypto holding reduce the tax on a gain from another?

Section 115BBH does not allow it. A loss on one virtual digital asset cannot offset a gain on another, in the same year or any later one.

Does the 1 percent TDS add to the 30 percent tax bill?

No. The 1 percent withheld under Section 194S is a credit against the 31.2 percent effective tax due at filing.

Crypto investments are subject to market risk. Not financial advice.