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With the rising popularity of digital assets like Bitcoin and Ethereum in India, it’s crucial for investors to understand the tax implications. Since April 2022, the Indian government has implemented clear taxation rules on virtual digital assets (VDAs), including cryptocurrencies. If you’re trading or investing in crypto, staying compliant with these tax laws is not just smart—it’s mandatory.

📊 How Is Cryptocurrency Taxed in India?

According to the Finance Act 2022:

  • A flat 30% tax is levied on any gains from the sale or transfer of crypto assets.
  • A 1% TDS (Tax Deducted at Source) is deducted on crypto transactions exceeding ₹10,000 in a financial year.
  • No deductions are allowed except for the cost of acquisition.
  • Losses from crypto cannot be set off against other income.

This taxation policy applies whether you’re a short-term trader, long-term holder, or occasional buyer.

🧾 Reporting Crypto in Your ITR

Crypto investors must report their earnings in their Income Tax Return (ITR) under “Income from Other Sources” or “Capital Gains.” It’s important to:

  • Maintain records of all transactions (dates, amounts, wallet addresses, and parties involved).
  • Use FIU-compliant platforms that provide downloadable tax reports.
  • Stay updated with the Income Tax Department’s latest guidelines.

🔍 Real Example:

Bought Bitcoin at ₹18,000 (in 2015) → Sold at ₹30,00,000 (in 2025) =
Taxable gain: ₹29,82,000
30% tax payable: ₹8,94,600
TDS paid: Adjusted at 1% at time of transaction.

✅ Best Practices for Crypto Tax Compliance

  1. Use regulated exchanges like CoinSwitch (FIU-registered) partnered with Payback.
  2. Avoid cash transactions or anonymous wallets to remain compliant.
  3. Keep a detailed ledger of buy/sell, swap, staking rewards, or airdrops.
  4. Consult with a tax advisor before filing returns.

💼 Why Invest with Payback?

Payback, in partnership with SEBI-registered Arihant Capital and FIU-compliant CoinSwitch, provides a secure, transparent platform for investing in cryptocurrencies. From opening your account to filing your crypto taxes, Payback ensures your investment journey is safe, smart, and compliant.

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Payback is an authorized partner of Arihant Capital Markets Limited, a SEBI-registered stock broker and depository participant, and an Authorized Partner of CoinSwitch crypto exchange (operated by Bitcipher Labs LLP).
Arihant Capital's SEBI Registration Number: INZ000180939. Member Details: NSE: 07839; BSE: 313; NSDL DP ID: IN301983; CDSL DP ID: 43000; NCDEX: 01274; MCX: 56565; AMFI ARN: 15114 (Valid until 18/12/2025); SEBI Merchant Banking Reg. No.: MB INM000011070; SEBI Research Analyst Reg. No.: INH000002764 (BSE RA Enlistment No. 5168).
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•⁠ ⁠Legal Entity: Bitcipher Labs LLP (registered under FIU).
•⁠ ⁠Nodal Officer Contact for law enforcement/regulatory authorities: [nodaldesk@crypto.coinswitch.co](mailto:nodaldesk@crypto.coinswitch.co)
•⁠ ⁠Platform technology licensed from Bitkuber Investments Pvt. Ltd (CIN U65990KA2021PTC145060).
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Infinity, Electra Block, 1st Floor, Wing A Exora Business Park, Prestige Tech Park II, Bellandur, Bengaluru – 560037, Karnataka, India. Registered Address of Arihant Capital: 6, Lad Colony, Y.N. Road, Indore – 452003.
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Crypto products are unregulated and highly risky, with no regulatory recourse for losses. Trading involves substantial risk and potential loss exceeding initial investments. Only risk capital should be utilized, and past performance does not guarantee future results.
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Attention Investors:
•⁠ ⁠KYC is a one-time exercise across all SEBI intermediaries.
•⁠ ⁠Keep mobile number/email updated with your stockbroker and depository participant.
•⁠ ⁠Verify transaction alerts from exchanges/depositories regularly.
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