Crypto Tax Filing India Guide FY 2022-2023: Tax Implications, Rules, Date, key Points – Explained


Crypto Tax Filing India 2022: The Union Budget 2022 proposed to classify cryptos as virtual digital assets (VDA). Even as crypto has been specified as assets, tax treatment is not like other assets. As per the new crypto tax rule, an individual has to pay a flat 30 percent tax on income earned from transfer of cryptocurrencies and other virtual digital assets, including NFTs.

According to Archit Gupta, founder and CEO of Clear (formerly Cleartax), the taxpayer is not allowed any deduction from the crypto asset’s sale price, except the cost of acquisition. The government recently clarified that the mining infrastructure costs will not be included in calculation of the cost of acquisition.

Crypto Tax Rule: No set-off of losses allowed 

The intra-head adjustment of losses, i.e. set-off of loss arising from one VDA with the income from another VDA, is not permitted. Explaining this with an example, Gupta said, if you have a loss from the transfer of Bitcoin and have profited from the transfer of NFTs, you cannot knock off the Bitcoin loss from the profits on the transfer of NFTs. You will have to pay a flat rate of 30 percent tax on profits from NFT transfer.

Further, losses from crypto transfer cannot be set off against income under any other head. This means, gains from the sale of equity, mutual funds, assets such as property, etc., won’t be allowed to be set off from loss from crypto.

Crypto Tax Rule: No carry forward allowed

The crypto tax law mandates that the taxpayer cannot carry forward cryptocurrency losses.

“If you have a loss from the transfer of crypto in one financial year, it cannot be carried forward to the next year to set off against future gains,” Gupta told FE Online.


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