In 2022 the Indian authorities acknowledged the cryptocurrencies in India by classifying them as VDA aka Virtual Digital Assets and introducing a taxation framework for cryptocurrency. In this article we will learn how to file crypto tax in India with Crypto Tax Filing and How to Pay Crypto Taxes in India. As for FY 22-23 or AY 23-24 ITR Filing already has been started so you have to learn about new VDA Schedule which has been introduce for Crypto Tax Filing.

How much tax will you pay on cryptocurrency in India ?

You’ll pay 30% tax on profits from trading, selling, or spending crypto and a 1% TDS tax on the sale of crypto assets in a single FY[Financial Year].

How to File Crypto Tax in India

Before Crypto Tax Filing you need to understand about the ITR Forms. You need to select the proper ITR Forms for the ITR Filing and payment of crypto taxes. Even A separate schedule has been introduced for reporting income from crypto and other VDA.

Which ITR form you need to file: –

  1. ITR 2 Form
  2. ITR 3 Form

Form ITR 2 for Crypto Tax Filing –

  • For those who have Income from salary
  • Income from Bank Interest, Mutual Fund, and Equity
  • Income from sale of crypto and get profit/loss from them (between April 2022- March 2023)

Form ITR 3 for Crypto Tax Filing –

  • For those who have Income from Business or salary or both
  • Income from Bank Interest and Equity
  • Income from crypto

The government has added a separate section in the ITR forms for reporting income from cryptos and other VDA. There is a separate schedule for VDA that requires details such as

  1. Date of acquisition,
  2. Date of transfer head under which income to be taxed (Capital Gain),
  3. Cost of acquisition (In case of gift) for transfer of VDA.
  4. Other minor tweaks are in the general info section and TCS section

The Finance act 2022 has introduced section 115BBH and it will be applicable from AY 2023-24. The section provides that the income on the transfer of the VDA will be taxable @ 30%. The taxpayer cannot take the deduction in respect of any expenditure other than the cost of acquisition.

When Pay Tax on Cryptocurrencies in India?

These transactions can lead you to pay the 30% crypto tax:

  • Selling crypto for INR or another fiat currency.
  • Trading crypto for crypto, including stablecoins.
  • Spending crypto on goods and services.

However, the 30% tax won’t always apply as sometimes the ITD will view you as having income instead. In these instances, you’ll pay tax at your Individual Tax Rate on receipt. This includes:

  • Gifting crypto – if you are the recipient of the gift
  • Mining coins.
  • Staking rewards.
  • AirDrops.
  • Getting paid in crypto

You can Read here more about How to Calculate Crypto Taxes in India.

TDS on Crypto Assets

1% TDS will be charged when a crypto asset is transferred.

  • The 1% TDS applies to transactions from the 1st of July 2022.
  • When trading on Indian exchanges then TDS will be deducted by exchanges.
  • When trading through P2P platforms or international exchanges – the buyer is liable to deduct TDS.
  • In case of crypto-to-crypto trades, TDS will be applied @ 1% to both buyer and seller.

Where Can You Check Your TDS Deduction on Crypto?

  • Under 194S your TDS has been deducted and showing in the E-filling portal. You can see which exchange and how many amount of TDS has been deducted against you.
  • You can check and verify your TDS deduction in the AIS tab of service section of e-filling portal.

See the Chart for 1% TDS deduction on Crypto and Trading respectively.

For Cryptocurrency: –

Cyrpto Buy No TDS
Cyrpto Sell 1% TDS
Limit Buy No TDS
Limit Sell 1% TDS
CIP No TDS
Earn No TDS

For P2P Trading: –

Insta Spot Buy No TDS Applicable (App)
Quick Buy Insta Buy No TDS Applicable (Web)
Insta Spot Sell 1% TDS Applicable (App)
Quick Buy Insta Sell 1% TDS Applicable (Web)
Spot Buy INR Pair – No TDS Applicable
Spot Sell INR Pair – 1% TDS Applicable
Spot Buy Non – INR Pair(c2C) – 1% TDS Applicable
Spot Sell Non – INR Pair(c2C) – 1% TDS Applicable
Margin Long 1% TDS Applicable on Total Value of position for both opening and closing order
Margin Short 1% TDS Applicable on Total Value of position for both opening and closing order
Lend/Earn No TDS Applicable
Futures No TDS Applicable

Crypto Tax on FY 2023-24

  • New tax regime is not applicable on cyrpto.
  • 1% TDS is mandatory for everyone. If anyone fails to do this then it can cause of imprisonment for a period of 3 months to 7 years plus a fine as per the UNION BUDGET 2023.

You’ll file your crypto tax from using the Income Tax Form ITR-2 or ITR-3. This article contains all the important points that should be considered or related to the crypto tax filing and how to pay crypto tax.