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Author: Admin | 2025-04-28
In the 2022 budget, new rules related to the taxation of cryptocurrencies have been introduced. Flat 30% Tax on Profits:Since FY 2022-23, a flat 30% tax is levied on crypto gains, irrespective of your income bracket. Profits are taxed equally, with no differentiation between short-term and long-term gains. The new ITR forms now include Schedule - Virtual Digital Assets (VDA) for reporting crypto/NFT-related gains. TDS at 1%:A 1% TDS applies to transactions exceeding ₹10,000 (or ₹50,000 in specific cases) in a financial year. This is automatically deducted by the exchange during transactions, eliminating extra paperwork. Whether you’re a private investor, a trader, or simply receiving crypto as a gift, every transfer and transaction may be taxed. Additionally, crypto gifts, mining, staking rewards, and airdrops are all considered taxable.No deduction is allowed except for the cost of acquisition. How do I invest in cryptocurrency? You'll need a "wallet" that can store your cryptocurrency to buy cryptocurrencies. In addition, you need to ensure that KYC is successfully done in the account to be eligible to purchase cryptocurrency. In general, you open an account on a cryptocurrency exchange and then verify it, and use real money to purchase cryptocurrencies like Bitcoin or Ethereum. How is Cryptocurrency Taxed in India? Cryptocurrencies are classified as Virtual digital assets and are subject to tax in India. Here’s how they are taxed - The gains from trading cryptocurrencies are subject to tax at 30% (plus 4% cess) as per section 115BBH. Any transfer of crypto assets on or after 1 July 2022 for an amount of Rs.50000 or Rs.10,000 in some cases is subject to a Tax deducted at source (TDS) at 1% under section 194S. The transfer of crypto assets during a year by investors, either private or commercial, is subject to crypto tax. The tax rate on short-term and long-term gains is the same, and it applies to all types of incomes. The earnings from trading, selling, or swapping cryptocurrencies are taxed at a flat 30% (plus a 4% surcharge) for both capital gain and business income. Other than this, a TDS at 1% is also applicable on the sale of crypto assets of transactions exceeding Rs.50,000 (or Rs.10,000 in exceptional cases). Cryptocurrency tax calculation is now very easy with Tax2win’s cryptocurrency tax calculator. How to Calculate Tax on Crypto? You have to pay a tax of flat 30% on your crypto profits. Here’s how
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