Struggle with Taxation for Crypto traders/Holders in India

Tax filing for the last financial year has been ongoing in India and the last date is 31st July 2023 unless it is not extended. Sometimes government extends the date but the last year it was not extended. It is always the best practice to file the taxes on time without waiting for any last-date extension. It is never guaranteed that the government is going to extend the timeline and even in the last moments things can create a lot of problems. Taxation is one of the government liabilities that is something we always need to pay accurately and on time to avoid issues.

This is the first year of the tax filing because it was implemented last year so there is a lot of confusion. Crypto traders are struggling with the tax filing this year because of no proper clarity in place. Ideally, the government should have done something to make the process easy but it seems that they are not much worried about it and they have just implemented the tax without even thinking that it can create a lot of issues for the people who are part of the Crypto. If a comment is expecting to collect the tax from the crypto community then it is their responsibility to provide clarity and help the crypto users for easy tax filing. I have been reading about crypto taxation for the last couple of weeks and trying to understand more about it. Today I read a post by @sanjeevm and he also shared that he is facing a problem with the ITR filing portal. I believe that many are struggling with the same problem and the sad part is that the government has not provided any proper documentation to understand taxation better.

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I'm not in the category of tax filing because I have not sold anything including the Fiat or the crypto so this does not apply to me but out of curiosity I spend some hours to understand. there are some videos available on Youtube for clarification and I'm surprised that a lot of people are commenting that they are also struggling with this tax problem. so altogether it is one of the biggest problems as of now with taxation and there has to be some solutions to get rid of it. I thought of creating this post to share some useful information if in case you find it worthy. It is helpful for you only if you are from India so give it a read if you like.

Tax Calculation

Calculation is the biggest problem with crypto taxation because most of us are not aware that how to calculate and what is the payable amount that we need to pay to the government. This website https://www.koinx.com/ is helpful to get your tax filing done. You can access this website for free by using your mobile number or email id and there is no KYC requirement. This website supports almost every exchange available in India and even some of the leading international exchanges are there so you need to fetch the transaction data within the website. It will calculate it for you and you will be able to see the payable amount. you can access the website for free but if you want the report to be sent out to your email ID or download then it is a paid service based on several transactions. if you are OK to pay then go for it else you can calculate by yourself since everything will be displayed on your screen. I have no affiliation with this website so please don't think that I'm getting any benefit for that. I am just trying to share the information which can help many other Indians over here.

You can reach out to them for any tax-related query and their response TAT is good as they mostly respond in 4 business hours. I have done it a few times so I can share based on my experience.

Tax Filing

You can do self-filing after the tax calculation and that should not be taking too long because you will be ready with whatever the payable amount. It is suggested to follow the regulations or whatever the tax rules are applicable. Whatever is income generated through the cryptocurrency will be liable for a 30% tax rate. Even if you have no other income then also you are liable to pay the income tax because there is no way that you can offset your losses in Crypto.

Selling cryptocurrencies, whether for fiat money or other cryptocurrencies, is subject to a 30 percent tax rate with a 1 percent TDS deduction.

Please note that you are liable to pay taxes if you have sold crypto. It does not matter whether it's INR or other crypto but you will need to pay tax as per the current rule. You can say that why should you pay since you have not withdrawn the profit but that is not the criteria as per the tax rules. As long as you sell off and book profit in the form of fiat or any other crypto the tax will apply to a rate of 30%. But if you have not sold anything then it is not applicable in your case. Also, note that in the case of buying cryptocurrency using INR, you need not pay any tax and in the case of income you need to deduct the buying cost from the sale amount.

I am also sharing some of the useful links that you might find helpful to learn and understand more about crypto taxation.

Useful links for crypto taxation

Cryptocurrency Tax FAQs

ITR for crypto gains: What should investors keep in mind

Hope I can provide useful information.

Thank you so much
Stay Safe

Posted Using LeoFinance Alpha