Know About Cryptocurrency Tax

Virtual Digital Assets

Cryptocurrencies in India fall under the virtual digital assets (VDAs) category and are subject to taxation. The profits generated are taxed at a rate of 30 per cent, with an additional four per cent cess as per Section 115BBH.

No Intermediaries

Cryptocurrencies are digital currencies that operating without intermediaries such as banks or other financial institutions.

Tax Calculation

The crypto tax is set at 30 per cent and is applied to the income derived from cryptocurrency transactions. This income is calculated as the difference between the sale and cost prices 

Cryptocurrency Transactions Are Subject To Taxation

Receiving cryptocurrency as a gift or spending cryptocurrencies to purchase goods, etc., make cryptocurrencies subject to taxation.

Income Tax Return

The declaration of cryptocurrency taxes is mandatory using either the ITR-2 form or the ITR-3 form. The newly updated ITR forms feature a dedicated section called 'Schedule VDA' explicitly for reporting cryptocurrency gains or income.

Taxation of gains from crypto

The taxation of gains from crypto-transactions can be classified into two categories, Business income and Capital gainsTax On crypto gifts.

Tax On Crypto Gifts

When taxing crypto gifts, the treatment varies based on the nature of the gift, whether it's money, immovable property, or movable property.

Compiled by Syed Muskan