What is Cryptocurrency?
Cryptocurrency is a digital currency used to buy or sell goods and services. It has revolutionized global trading, creating a new financial ecosystem.
The Popularity of Cryptocurrency Trading
Cryptocurrency trading has surged worldwide due to its decentralized nature, potential for high returns, and accessibility via online platforms.
Government Regulations on Crypto Taxes
Key Tax Rules in India:
- 30% Tax on Profits: Applicable when selling cryptocurrency.
- 1% TDS Deduction: Mandatory for all crypto transactions.
- Tax Reporting: Classified under Capital Gains or Business Income (Special Income) in ITR filings.
Sample Crypto Annual Tax Statement
Capital Gains Summary
Overview of profit/loss from crypto disposals/sales/trades:
| Summary | Value |
| --- | --- |
| Number of Disposals | 371 |
| Proceeds from Sales | ₹1,559,558.92 |
| Acquisition Costs | ₹1,559,558.92 |
| Profit Before Losses | ₹1,559,558.92 |
| Losses | ₹0 |
| Net Gains | ₹1,559,558.92 |
Other Gains (TAX Year 2021–22)
Gains from futures/derivatives (excluded from capital gains):
| Summary | Value |
| --- | --- |
| Number of Trades | ₹0 |
| Total Profit | ₹0.00 |
| Total Loss | ₹0.00 |
| Net Gains | ₹0.00 |
How to Report Crypto Income in Tax Filings?
- Upload/Import Tax Reports: Use platforms like myITreturn.com.
- Download Reports: From your crypto exchange or connect via API.
- Calculate Tax: Automatically compute liabilities.
- E-file IT Return: Submit directly to tax authorities.
👉 Need help with crypto taxes? Get expert guidance here
Frequently Asked Questions (FAQs)
1. How are cryptocurrencies classified under Indian tax law?
Cryptocurrencies are defined as Virtual Digital Assets (VDAs) under the Income Tax Act, covering tokens, NFTs, and similar digital representations of value.
2. Is crypto trading considered business income or capital gains?
- Business Income: For regular traders/miners.
- Capital Gains: For investors holding crypto for long/short-term gains.
3. What is the tax rate for crypto income?
A flat 30% tax under Section 115BBH, plus surcharge/cess. No deductions (except acquisition costs) or loss offsets are permitted.
4. Is TDS applicable on crypto transactions?
Yes. 1% TDS is deducted under Section 194S for all crypto transfers.
5. How are crypto gains calculated?
| Particulars | Amount |
| --- | --- |
| Sale Value | ₹5,00,000 |
| Less: Purchase Value | ₹4,00,000 |
| Net Gain | ₹1,00,000 |
6. Can minors file crypto tax returns?
Yes. Minors with PAN must file separately if they earn crypto income through independent trading.
👉 Explore crypto tax tools for seamless filing
Key Takeaways
- Keywords: Crypto tax calculator, cryptocurrency taxes, TDS on crypto, capital gains crypto, virtual digital assets, crypto tax India, ITR filing crypto.
- SEO Tips: Use headings, tables, and FAQs for readability. Avoid keyword stuffing.
- Commercial Links: Only include approved anchor texts linking to
https://www.okx.com/join/BLOCKSTAR.