Understanding Crypto Taxation in India
Cryptocurrency taxation in India follows specific guidelines under Section 115BBH (30% flat tax on profits) and Section 194S (1% TDS on transfers). Whether you're trading, mining, or receiving crypto as payment, accurate tax calculation is crucial for compliance. Here’s how a crypto tax calculator streamlines this process.
How a Crypto Tax Calculator Works
A crypto tax calculator automates the complex task of tracking gains/losses across transactions. By syncing with exchanges/wallets, it:
- Aggregates Data: Imports transaction history from 180+ platforms (CEX, DEX, blockchains).
Calculates Liabilities: Applies Indian tax rules to determine:
- Capital gains (30% flat rate).
- TDS obligations (1% on transfers >₹10,000/₹50,000).
- Generates Reports: Prepares audit-ready summaries for ITR filing.
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Key Features of an Ideal Tax Calculator
| Feature | Benefit |
|---|---|
| Multi-Exchange Sync | Unified view of portfolios across Binance, WazirX, etc. |
| Tax Rule Compliance | Accurate application of Sections 115BBH and 194S. |
| Capital Gain Breakdown | Detailed P&L statements for each asset. |
| TDS Tracking | Alerts on deductible amounts and deadlines. |
Step-by-Step Guide to Using a Tax Calculator
- Connect Accounts: Link your Indian exchange accounts (e.g., CoinDCX, ZebPay).
- Review Transactions: Classify trades as investments, income, or gifts.
- Adjust Cost Basis: Specify acquisition costs for inherited/staked crypto.
- Download Reports: Use Form 26AS to reconcile TDS deductions.
FAQs: Crypto Taxes in India
1. What’s the tax rate for crypto profits?
- 30% on gains, plus 1% TDS on transfers exceeding thresholds.
2. Is TDS refundable?
Yes, if your annual tax liability is lower than deducted TDS.
3. How are mining rewards taxed?
Treated as “Income from Other Sources” (taxed per slab rates).
4. Are NFT sales taxable?
Yes—30% on profits + 1% TDS per sale.
5. Can I deduct trading losses?
No. Indian tax laws don’t allow offsetting crypto losses against gains.
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Why Choose a Specialized Calculator?
- Accuracy: Avoid manual errors in complex calculations.
- Time-Saving: Process thousands of transactions in minutes.
- Audit Proof: Maintain compliant records for 6+ years.
Example: If you sold Bitcoin bought at ₹20L for ₹30L, the tool automatically calculates ₹3L tax (30% of ₹10L profit) and TDS deductions.
Final Tips for Tax Compliance
- File ITR Promptly: Declare crypto income by July 31 each year.
- Reconcile TDS: Verify Form 26Q/26QE entries match your records.
- Consult Experts: Seek advice for edge cases (e.g., gifting, DeFi).
Staying compliant is easier with the right tools. Start simplifying your crypto taxes now!
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