You must pay 30% tax in India on any earnings you make from buying, selling, or using cryptocurrencies. Additionally, if you sell cryptocurrency assets for more than₹50,000 (or₹10,000 in some circumstances) in a single fiscal year, you will be subject to a 1% TDS. Income tax at your individual slab rate may also apply to earnings from mining, airdropping, and staking.
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When Does India’s 30% Crypto Tax Rate Apply?
The following situations result in bitcoin transactions in India being subject to a 30% tax rate:
trading cryptocurrencies for cash, such as Indian rupees.
exchange of one cryptocurrency for another, including stablecoin transactions.
buying products or services with cryptocurrency.
This 30% charge does not, however, automatically apply to all cryptocurrency transactions. In certain situations, the activity might be seen by the Income Tax Department (ITD) as producing additional revenue, which would then be subject to taxation at your individual tax slab rate upon receipt. These situations consist of:
Getting cryptocurrency as a present (see the gift tax section for specific regulations).
Cryptocurrency mining Refer to the mining tax section for further information.
Receiving bitcoins in exchange for services.
How Much Tax Does Cryptocurrency Cost in India?
In summary, crypto assets will now be subject to two different forms of crypto taxes. The yearly gains from cryptocurrency trading are subject to 30% tax, and each cryptocurrency transaction is subject to 1% TDS. It is possible to file the TDS cut for returns within the ITR filing process.
1% TDS on cryptocurrency: what is it?
The updated Income Tax Regulations for Crypto Taxation in India state that all transactions involving the sale of crypto assets are subject to the 1% TDS. As of July 1, 2022, this will be in effect. Please be aware, too, that TDS will be subtracted off the total sale price, not simply the profits. It makes no difference to TDS whether you make a profit.
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