## 1. How crypto is classified
In India, crypto comes under “Virtual Digital Assets (VDA)” — this includes:
* Cryptocurrencies (BTC, ETH, etc.)
* NFTs
* Tokens
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## 2. Tax on crypto profits (VERY important)
### 🔥 Flat 30% tax on profits
* Applies to any profit from selling, swapping, or spending crypto
* Same rate no matter your income slab
* Plus 4% cess (so effectively ~31.2%)
📌 Example
You buy BTC for ₹1,00,000 and sell for ₹1,50,000
→ Profit = ₹50,000
→ Tax = 30% of 50,000 = ₹15,000 (+ cess)
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## 3. No loss adjustment allowed 😬
This is the harsh part:
* ❌ You CANNOT set off crypto losses against:
* Other crypto gains
* Salary, business income, stocks, etc.
* ❌ You CANNOT carry forward crypto losses to future years
Each transaction is taxed independently.
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## 4. 1% TDS on crypto transactions
* 1% TDS is deducted on the total value, not profit
* Applies when:
* You sell crypto
* You trade crypto for crypto
* Usually deducted by exchanges automatically
📌 Example
You sell crypto worth ₹50,000
→ ₹500 TDS deducted
→ You can adjust this ₹500 when filing ITR
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## 5. Crypto-to-crypto trades are taxable
Trading BTC → ETH?
* That counts as a sale of BTC
* Profit on BTC is taxed at 30%
* ETH’s value on that day becomes your new purchase price
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## 6. Gifts of crypto 🎁
* Crypto received as a gift is taxable for the receiver
* Taxed at market value
* Exception: gifts from close relatives (parents, spouse, siblings, etc.)
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## 7. Mining & staking income
* Mining rewards / staking rewards = taxable as income
* Taxed at your normal slab rate
* When you later sell those coins → 30% tax on profit again
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## 8. GST (for traders & exchanges)
* Normal investors: no GST
* Crypto exchanges & professional traders may attract 18% GST on fees/services
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## 9. ITR filing (don’t skip this)
* Crypto income must be reported in your Income Tax Return
* Even if TDS was already deducted
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* ✅ 30% flat tax on crypto profits
* ❌ No loss set-off or carry forward
* ✅ 1% TDS on every trade
* ✅ Crypto gifts & mining are taxable
* ❗ Every trade matters — even swaps
