Question 1

When is airdrop taxed?

Accepted Answer

Tax liability arises when you receive the airdrop. 30% tax + 4% cess applies on Fair Market Value (FMV) — even if you haven't sold.

Question 2

How is airdrop FMV determined?

Accepted Answer

The closing price on CoinGecko/CoinMarketCap on the receipt date is considered FMV. If the token is unlisted, acquisition cost is zero.

Question 3

What if the airdrop token becomes worthless?

Accepted Answer

Tax is still due on receipt. If you sell later at a loss, that loss cannot be offset (Section 115BBH).

Question 4

Are all airdrops taxable in India?

Accepted Answer

Yes. All airdrops are treated as income under Section 115BBH at the time of receipt. The fair market value of tokens on the date you receive them is taxable at 30% + 4% cess.

Question 5

What if I receive an airdrop of a token with no market value?

Accepted Answer

If a token has no verifiable market price at the time of receipt, the taxable value is NIL. Tax applies when you eventually sell it — at 30% on the sale proceeds.

Question 6

How do I report airdrop income in ITR?

Accepted Answer

Report airdrop income under Schedule VDA in your ITR. Use the fair market value on the date of receipt as the cost of acquisition and sale value when you sell.

Question 7

Does TDS apply on airdrop tokens?

Accepted Answer

TDS under Section 194S applies on the sale of airdropped tokens (when you sell them), not on receipt. The 1% TDS is deducted by the exchange when you sell above the ₹50,000 threshold.

Question 8

Is there a difference in tax treatment between airdrops and mining rewards?

Accepted Answer

No difference in tax rate — both are taxed at 30% + 4% cess on fair market value at receipt. The distinction is in accounting: mining may be treated as business income by some CAs, while airdrops are typically other income.

Airdrop Tax Calculator

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