Frequently Asked Questions
What is crypto tax calculator?
With the help of a tax calculator, you can determine how much tax you owe on your cryptocurrency transactions. KoinX 's crypto tax calculator lets you connect your portfolio to your preferred exchange in a way that is accurate and helps you keep track of your tax obligations.
The tool takes the amount of crypto you bought or sold into consideration, along with the prices at which you bought or sold it, in order to calculate your gain or loss.
With the help of a tax calculator, you can determine how much tax you owe on your cryptocurrency transactions.KoinX's crypto tax calculator lets you connect your portfolio to your preferred exchange in a way that is accurate and helps you keep track of your tax obligations.
How do I use a cryptocurrency tax calculator?
In order to use a cryptocurrency tax calculator, you need to input information about your cryptocurrency transactions.
This includes:
1. The financial year you want to calculate your taxes for.
2. The country you want to calculate your taxes for.
3. The purchase price of the coin.
4. The sale price of the coin.
After you enter your information, the cryptocurrency tax calculator will calculate the gain or loss on every transaction.
You will get results that mention:
1. The total profit/loss you made
2. The tax you’re liable to pay
How do I accurately calculate my tax liability?
Examples:
Taxes On Standard Trades In India:
On an investment of ₹1,00,000 and an income gain of ₹10,000 that was made during FY23-24, a flat 30% cryptocurrency tax is applicable. This means ₹1,10,000 was received from the sale of the crypto at the end of FY23-24, and you will be required to pay ₹3,000 on your crypto profits for that fiscal year (plus cess and surcharge).
Taxes For Investors That Bought Before The Tax Bill (India) -
Say you bought a bitcoin for about $4000 in 2019. Fast forward to 2022, the same Bitcoin was worth $35,000. If you sell the Bitcoin at $35,000
In this case, both you and the buyer will have tax implications.
1. The buyer needs to deduct TDS at 1% of the value of the bitcoin and deposit it with the Income tax department in Form 26Q/26QE.
2. As the seller, you must report the transaction as a capital gain in your tax return as you cashed out your investment.
Capital gain = The price you paid for the Bitcoin - its value at the time of the transaction.
Is it possible to calculate crypto tax automatically?
Using a cryptocurrency tax calculator or software, you can calculate your cryptocurrency tax liability automatically. A tax calculator can allow you to calculate your crypto taxes. It does so by directly integrating with your exchanges and wallets. This saves time and takes the manual setting away, making it easier to calculate your taxes.
Alternatively, you can also use crypto tax software which gives you a rough estimate of your crypto taxes. However, you should also know that these tools are not a substitute for professional tax advice, and you should consult a tax professional if you have questions or concerns about your tax liability.
Will I be liable to pay taxes on my crypto profits?
In general, you will be liable for taxes on your cryptocurrency transactions if you realize a capital gain. A capital gain occurs when you sell or exchange cryptocurrency for more than you acquired it for.
For example, if you bought one bitcoin for $10,000 and later sold it for $20,000, you would have a capital gain of $10,000, and you may be liable for taxes on that gain. The specifics of how cryptocurrency is taxed can vary depending on your country of residence and other factors.
How to accurately calculate my tax liability?
Calculating your tax liability is almost the same as calculating your regular tax liability. However, there are some considerations to keep in mind.
1. Gather all the relevant documents that include the records of your crypto transactions and wallet statements.
2. Determine the cost basis which will be used to determine your capital gains or losses when you sell/dispose of your crypto
3. Calculate your capital gains/losses. If the sale price is higher than your cost basis, you have a capital gain. If it's lower, you have a capital loss.
4. Report your gains/losses on your tax return. You can also claim deductions for certain expenses related to your crypto transactions - including your business expenses (not applicable for Indian Investors).
The tax laws could be a little tricky to understand, especially in crypto, so it's essential to consult a tax professional to accurately report your tax liabilities.
How Is Crypto Taxed In India??
In India, cryptocurrency is taxed at 30% on profits from trading digital assets, per Section 115BBH introduced in the 2022 Financial Budget. Additionally, Section 194S imposes a 1% Tax Deducted at Source (TDS) on crypto transfers exceeding ₹10,000 (₹50,000 in some cases) from July 01, 2022.
This applies to private investors and commercial traders without distinguishing between short-term and long-term gains. Section 194S of the IT Act mandates a 1% TDS on crypto/NFT transfers, deducted by the buyer or Indian exchange.
What Are The Crypto Tax Rates In India?
The crypto tax rates in India, introduced in the 2022 Financial Budget, effective July 01, 2022, impose a 30% tax on profits from trading cryptocurrencies. Moreover, a 1% TDS (over ₹10,000 and ₹50,000 sometimes) applies to crypto transfers. Buyers are responsible for deducting TDS on payments, and Indian exchanges automatically do so.
Do You Have To Pay TDS On Cryptos In India?
TDS (Tax Deductible at Source) on cryptos is mandatory in India. Introduced in the 2022 Financial Budget, a 1% TDS (over ₹10,000 and ₹50,000 in some cases) rate applies to transactions involving the transfer of Crypto/NFT, effective from July 01, 2022. The buyer is responsible for deducting and remitting this amount to the central government. While Indian exchanges automatically deduct TDS, those trading on foreign exchanges must manually deduct and file TDS returns to comply with tax regulations.
Is TDS Charged On Cryptocurrency Refundable?
Yes, TDS on cryptos are refundable. To claim a refund on the 1% TDS on crypto while filing an Income Tax Return (ITR), taxpayers must ensure that their total Income Tax liability for the year is less than the TDS amount deducted from crypto trading.
Is It Safe To Use A Crypto Tax Calculator In India?
Yes, KoinX is a trustworthy tax calculator tailored for the Indian tax system and regulations concerning cryptocurrencies. This tool is designed to assist users in estimating their cryptocurrency tax obligations in India. KoinX achieves this after users successfully link their CEX, DEX or wallets with the platform. It then closely monitors users' crypto portfolios on their selected exchanges and considers asset quantities and prices.
Which Is The Best Crypto Tax Calculator In India?
KoinX is India's best crypto tax calculator, catering to the needs of individuals, investors, and businesses. With seamless integrations from over 180 exchanges, wallets, and blockchains, users can effortlessly consolidate transactions from various sources in a unified dashboard. It simplifies the preview of transactions and categorises them based on activity, offering a comprehensive breakdown for accurate tax reporting.
Are Crypto Mining Taxable In India?
Yes, crypto mining is taxable in India. The Indian government has introduced taxes on income related to crypto mining as part of the 2022 financial budget. The income generated from mining cryptos is classified based on the type of activity, i.e., disclosed as "Income from Business" or "Income from Other Sources," depending on the nature of the mining activity. Whether mining is done for business purposes or as a hobby, it attracts taxation in India based on the individual tax slab.
Do I Have To Pay Taxes On NFTs In India?
Yes, NFTs in India are subject to taxation. If you buy an NFT with fiat currency, it is not taxable. However, purchasing cryptocurrencies like BTC or ETH is considered a taxable event. Per the Income Tax Act, all NFTs will be taxed at 30% (plus surcharge and cess) from April 1, 2022. Additionally, a 1% TDS will be deducted from every NFT sale. Therefore, individuals engaged in NFT trading in India must pay taxes on their transactions per the specified tax rates.
Are Crypto Staking Rewards Taxable In India?
Yes, crypto staking rewards are taxable in India. The staking income is treated as Other Income and is subject to applicable income tax slab rates. Additionally, when the crypto assets are sold, Capital Gains Tax is levied. Investors typically pay Income Tax upon receipt of staking rewards, with a flat 30% tax on any subsequent gains from selling the crypto assets.
Do I Need To Pay Taxes On Crypto Gifting In India?
In India, gifting cryptocurrencies is subject to taxation. According to Income Tax regulations, crypto gifts fall under movable property gifts. If the value of the gift is up to ₹50,000, it is tax-exempt. Gifts exceeding this amount from relatives remain tax-exempt, but those from non-relatives are taxable. Additionally, virtual digital assets received on special occasions, through inheritance, marriage, or in contemplation of death are exempt from tax. While the Financial Budget of 2022 introduced taxes on various crypto transactions, clarity on the taxation of crypto gifting remains limited.
Are Crypto Donations Taxable In India?
Yes, crypto donations are taxable in India. Despite the innovative nature of crypto transactions, donating via cryptocurrency is treated as the sale of digital assets in India. Consequently, any capital gains arising from such transactions are subject to taxation. This includes cross-border and anonymous donations made through cryptocurrencies, emphasizing the government's recognition of these contributions as taxable.
Do I Need To Pay Taxes If I Receive My Salary In Cryptos In India?
Yes, receiving a salary in cryptocurrencies in India is taxable. The income from crypto-related activities, including wages, is subject to taxation as per Indian crypto tax laws. The income is taxable whether you transfer it to your bank or engage in P2P transactions. The taxation applies not only to the crypto itself but also places individuals within the taxable salary slabs in India.
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