Crypto Tax in India: Important Aspects to Know About

crypto tax

Cryptocurrency has become an excellent investment for future generations. Everyone wants to invest in cryptocurrency to gain massive profits, from established business people to young professionals. Due to the increasing popularity of cryptocurrencies, the Government has started levying tax on crypto in India

The Government of India has rendered better clarity on the crypto tax structure in the Finance Bill, 2022. Under this amendment, people who hold cryptocurrencies would need to report their gains and losses from the digital assets as part of their income. 

Any income from the digital assets will be taxed at 30% irrespective of long or short-term investment. Since the investors are increasing their investment in purchasing and selling cryptos to gain huge profits, the tax on cryptocurrency in India is the right way to develop the concrete transaction. 

Things to know about the Indian crypto tax

Remember that there is no specific cryptocurrency tax in India. Instead, the Government plans to tax cryptocurrency as income from other sources. It is similar to income from fixed deposits, savings account interest, and lottery winnings. As said earlier, profits from cryptos and NFTs will be taxed at 30%. This flat tax rate applies to commercial traders, private investors, and individuals who transfer crypto assets. 

In addition, a TDS of 1% is also charged on payments of virtual assets. You have to pay tax on crypto in India when selling, trading, spending, and gifting crypto. Even if you mine coins and get paid in crypto, you must pay the Government the tax. The investor must pay the taxes on crypto transfers before the due date to avoid hassles. 

Difference between crypto investing and trading 

Even though many rules and laws are implemented towards cryptocurrency, people are still thinking about crypto trading vs investing which is better. Both crypto trading and investing come with their own risks. 

So, if you decide to get into the crypto world, you should be aware of those risks to avoid hassles. In addition, you should have enough understanding of the crypto tax. It assists you in making the right investment decision.

Crypto investing means buying crypto coins or tokens to hold them for a long time to increase their value and make huge profits. It is much similar to traditional investing, such as buying stocks. Crypto investments usually render a high degree of privacy and security because transactions are processed using blockchain technology. If you are aware of what are crypto swaps and even though crypto investing poses certain risks, it renders vast benefits such as high returns.

Crypto trading is similar to day trading, where traders regularly purchase and sell crypto coins. It helps them to take advantage of short-term price fluctuation. It is the right way to make money quickly, but it has huge risks. Before starting trading, developing the right crypto trading strategy suitable for your goals and risk tolerance is mandatory. Since the market is open 24×7, you can trade whenever and wherever you want. 


Now, you know the difference between crypto trading and investing. Additionally, you get some idea about the crypto taxation in India. So, you will now be ready to enter the crypto world and enjoy enormous benefits.

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