There is not much time left for the financial year 2025-26 to end. As the deadline of March 31 approaches, it becomes necessary to complete tax related work. Especially if you have invested or traded in cryptocurrencies, ignoring the rules can prove costly. The government has made strict rules regarding virtual digital assets, which are important for every investor to follow.
How much tax is levied on crypto?
In India, there is a direct tax of 30% on crypto earnings. Whether you have earned profits from trading, staking rewards or income from mining, the same tax applies in every situation. Apart from this, 1% TDS is also deducted on every transaction. Most importantly, you cannot adjust your crypto losses against any other income. That is, if there is a loss in one coin and profit in the other, then tax will have to be paid only on the profit part.
How to calculate tax correctly?
For tax calculation, first prepare a record of all your transactions. You can only deduct the purchase price while calculating profits. There is no deduction for electricity, internet or other expenses. Apart from this, it is also necessary to include the earnings from mining, airdrop or token distribution.
It is important to choose the right ITR form
If you invest occasionally, you can fill ITR-2 form. At the same time, if you do regular trading or run it as a business, then ITR-3 form will have to be filled. Now Schedule VDA section is also given in ITR, where it is mandatory to give information about every crypto transaction.
Must combine TDS and Form 26AS
It is very important to keep a record of 1% TDS deducted on every transaction. Make sure that your TDS is appearing correctly in Form 26AS. If there is any discrepancy in this, the Income Tax Department may seek answers from you.
What to do before the deadline?
- Download transaction reports from all exchanges and wallets
- Check TDS in Form 26AS
- Keep income in the right category
- Keep all documents and receipts safe