New Delhi: Scores of people in India are investing in cryptocurrencies like Bitcoin, Pi Coin and several others. The exponential rise of Bitcoin has attracted scores of people to pump in their money in cryptos. Despite the government levying tax of up to 30 percent on crypto in India, people are investing in it.
In this article, we inform you about how much tax is deducted on crypto earnings, and how much TDS is deducted. The investor has to visit the Income Tax e-filing website.
- Go to the Income Tax e-filing portal
- Log in with your PAN and password
- Choose the correct ITR form
- ITR-1 is only meant for those with salary income
- ITR-2: People who invested in crypto and made capital gains should select this form
- ITR-3: Select this form if you engaged in crypto trading as a business
- Next step is to fill in the income details, i.e., salary, capital gains, interest income and other income.
- Verify tax deductions and TDS: Check Form 26AS and AIS to ensure that tax deductions are reported correctly.
- Submit form and verify: Use Aadhaar OTP, Net Banking or Physical Verification for verification.
Crypto or Digital Asset (VDA) Reporting
- It is important for people engaged in crypto trading to keep track of purchase and sale date, cost and profit/loss.
- The crypto investors should calculate the capital gains by calculating the net gain by subtracting the purchase cost from the total sale price.
- Government has fixed a 30% flat tax on cryptos: Profits from crypto will be taxed at a flat rate of 30%, which cannot be set off against any other income.
- The crypto investor should ensure that TDS is reported correctly with Form 26AS. If there is any discrepancy, correct it immediately.
- Ensure that all transactions are recorded correctly as it will prevent any scrutiny by the Income Tax Department and avoid any problems in the future.
Tax structure on cryptos
Cryptocurrency Buying: 1 per cent TDS
30 per cent tax on profits booked on crypto
30% tax on profits in crypto to crypto trading
No tax on holding cryptos
No tax when one sends crypto from one wallet to another
Airdrops: Slab rate tax on receipt of crypto, 30% tax on selling it later
On donating crypto: 30 per cent tax
The article provides a comprehensive guide to cryptocurrency taxation in India. It explains the 30% flat tax on crypto profits, the 1% TDS on purchases, and the necessary steps for filing ITR forms (ITR-2 or ITR-3 depending on your activity). Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
