Hey guys, it’s time to know a little about Crypto Taxes in India. So from earlier blogs, you have grasped everything, and you are now trading. It is going very well. You have landed some nice profits for yourselves, but now you’re tensed about taxes on crypto in India, here we are to help you again.
So let’s start with answering frequently asked questions.
Is crypto taxed in India?
Yes, cryptocurrency is subjected to tax in India.
Prior to 2022, the Indian government had no official stance on the classification of crypto assets, nor the subsequent taxation of Bitcoin and other cryptocurrencies. But recently for the first time, the Indian authorities acknowledged the cryptocurrencies in India by classifying them as Virtual Digital Assets (VDAs) and introducing a taxation framework for VDAs – aka crypto.
How much tax will you pay on crypto in India?
You’ll pay a 30% tax on profits from trading, selling, or spending crypto and a 1% TDS tax on the sale of crypto assets exceeding more than Rs 50,000 in a single financial year. You may also pay Income Tax upon receipt at your individual tax rate if you’re seen earning other income in crypto, for example, through staking or mining.
When will you pay tax on crypto in India?
You may need to pay the 30% tax whenever you make the following transactions:
- Selling crypto for INR or another fiat currency.
- Trading crypto for crypto, including stablecoins.
- Spending crypto on goods and services.
Another question that might pop up to you is: Do you pay tax when transferring crypto?
Despite the confusing terminology from the ITD, you won’t pay tax when you transfer crypto between your own wallets.
How are gifts of crypto taxed in India?
If you receive a gift of crypto – whether that’s coins, tokens, or an NFT – you’ll be liable to pay Income Tax at your applicable slab rate, based on the fair market value of your gift.
This said, there are a couple of exceptions where you won’t pay tax when receiving a gift:
- Gifts made from close family members (parents, spouse, siblings of taxpayer and spouse, lineal ascendant or descendant of taxpayer and spouse) are not taxed on receipt.
- Gifts less than RS 50,000 in a single financial year are not taxed on receipt.
- Gifts received as a result of a marriage or via inheritance are not taxed on receipt.
When do you need to report your crypto taxes in India?
India’s financial year (FY) runs from April 1st to March 31st the following year. For example, the most recent financial year was from April 1st, 2021 to March 31st, 2022 (FY 2021-22). This will be the financial year you’ll be reporting on when you file your taxes this year.
The deadline to file taxes for taxpayers who are not subject to audits was July 31, 2022. For taxpayers undergoing an audit, the deadline was October 31, 2022.
So hopefully you will like this blog please share it with your friends and family who are into trading. See you next time with other such information. Please share your reviews in the comment box.
please note: please talk to your tax consultant before filing. Tax slabs and tax acts are matters of government there may be updation rules and slabs from time to time.
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