{"id":32718,"date":"2026-08-09T01:15:30","date_gmt":"2026-08-08T19:45:30","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=32718"},"modified":"2026-08-09T01:18:52","modified_gmt":"2026-08-08T19:48:52","slug":"common-misconception-of-crypto-taxation-in-india","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/","title":{"rendered":"Common Misconception of Crypto taxation in India"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a77ace0d8052\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a77ace0d8052\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Common_Misconception_of_Crypto_taxation_in_India\" title=\"Common Misconception of Crypto taxation in India\">Common Misconception of Crypto taxation in India<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Crypto_Futures_Contracts\" title=\"Crypto Futures Contracts\">Crypto Futures Contracts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Crypto_Perpetual_Futures_Contracts\" title=\"Crypto Perpetual Futures Contracts\">Crypto Perpetual Futures Contracts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Taxable_Crypto_Transaction\" title=\"Taxable Crypto Transaction\">Taxable Crypto Transaction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Crypto_Tax_Calculated_in_India\" title=\"Crypto Tax Calculated in India \">Crypto Tax Calculated in India <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#1_Tax_Deducted_at_Source_on_Crypto_can_be_claimed_Back\" title=\"1% Tax Deducted at Source on Crypto can be claimed Back: \">1% Tax Deducted at Source on Crypto can be claimed Back: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#No_Set-Off_or_Carry_Forward_of_Losses\" title=\"No Set-Off or Carry Forward of Losses\">No Set-Off or Carry Forward of Losses<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Common_misconception_of_crypto\" title=\"Common misconception of crypto\">Common misconception of crypto<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Reporting_Crypto_Income_in_the_Income_Tax_Return\" title=\"Reporting Crypto Income in the Income Tax Return\">Reporting Crypto Income in the Income Tax Return<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Foreign_Crypto_Holdings_and_Schedule_Foreign_Assets\" title=\"Foreign Crypto Holdings and Schedule Foreign Assets\">Foreign Crypto Holdings and Schedule Foreign Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Reporting_Crypto_Income_in_Your_Income_Tax_Return\" title=\"Reporting Crypto Income in Your Income Tax Return \">Reporting Crypto Income in Your Income Tax Return <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Missed_Reporting_Crypto_Income\" title=\"Missed Reporting Crypto Income?\">Missed Reporting Crypto Income?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Report_on_Crypto_Held_on_Foreign_Exchanges\" title=\"Report on Crypto Held on Foreign Exchanges: \">Report on Crypto Held on Foreign Exchanges: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Reporting_Crypto_in_Schedule_Virtual_Digital_Assets_and_Schedule_FA\" title=\"Reporting Crypto in Schedule Virtual Digital Assets and Schedule FA\">Reporting Crypto in Schedule Virtual Digital Assets and Schedule FA<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Consequences_of_Incorrect_Reporting\" title=\"Consequences of Incorrect Reporting\">Consequences of Incorrect Reporting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/common-misconception-of-crypto-taxation-in-india\/#Penalties_for_Incorrect_Crypto_Reporting\" title=\"Penalties for Incorrect Crypto Reporting: \">Penalties for Incorrect Crypto Reporting: <\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-32719\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/1756433202379.jpg\" alt=\"Common Misconception of Crypto taxation in India\" width=\"800\" height=\"800\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/1756433202379.jpg 800w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/1756433202379-300x300.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/1756433202379-150x150.jpg 150w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/1756433202379-768x768.jpg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Common_Misconception_of_Crypto_taxation_in_India\"><\/span><span style=\"color: #000080;\">Common Misconception of Crypto taxation in India<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Crypto_Futures_Contracts\"><\/span><span style=\"color: #000080;\"><strong>Crypto Futures Contracts<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A crypto futures contract is a legal agreement between two parties to buy or sell a cryptocurrency at a predetermined price on a specific future date.<\/p>\n<p>These contracts derive their value from the underlying crypto asset and are priced based on market expectations of future prices. Key features of crypto futures contracts include the following:<\/p>\n<ul>\n<li>A fixed expiration or settlement date.<\/li>\n<li>Settlement can occur either through physical delivery of the asset or cash settlement.<\/li>\n<li>Prices may trade at a premium or discount to the spot market depending on market sentiment and expectations.<\/li>\n<li>Traders must either close their positions or settle the contract upon expiry.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Crypto_Perpetual_Futures_Contracts\"><\/span><span style=\"color: #000080;\"><strong>Crypto Perpetual Futures Contracts<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Crypto perpetual futures, commonly known as perpetual contracts or perpetual swaps, are a variation of futures contracts that do not have an expiry or settlement date. Key features of perpetual contracts include the following:<\/p>\n<ul>\n<li>No expiration date, allowing positions to be held indefinitely.<\/li>\n<li>Prices are designed to closely track the underlying asset&#8217;s spot market price.<\/li>\n<li>Funding rate mechanisms are used to keep perpetual contract prices aligned with spot prices.<\/li>\n<li>Traders can maintain open positions as long as they satisfy margin requirements.<\/li>\n<\/ul>\n<p>In simple terms, traditional futures contracts have a predefined end date, whereas perpetual futures can remain open indefinitely, making them particularly popular among active crypto traders.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Taxable_Crypto_Transaction\"><\/span><span style=\"color: #000080;\"><strong>Taxable Crypto Transaction<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-32720\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/Crypto-Ecosystem-in-India.jpg\" alt=\"Crypto Ecosystem in India\" width=\"1200\" height=\"675\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/Crypto-Ecosystem-in-India.jpg 1200w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/Crypto-Ecosystem-in-India-300x169.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/Crypto-Ecosystem-in-India-1024x576.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/Crypto-Ecosystem-in-India-768x432.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/08\/Crypto-Ecosystem-in-India-800x450.jpg 800w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<ul>\n<li>Crypto Is Taxed in India: Flat 30% Tax on Crypto Gains. Any profit earned from the transfer of a virtual digital asset, including cryptocurrencies and NFT (non-fungible tokens), is taxed at a flat rate of 30% u\/s 115BBH of the Income Tax Act.<\/li>\n<li>In addition, a 4% Health and Education Cess and applicable surcharge may apply. This tax rate remains the same regardless of Your income tax slab,<\/li>\n<li>The amount of gain earned, or the period for which the crypto asset was held. Except for the cost of acquisition, no other expenses or deductions are generally allowed while calculating taxable gains.<\/li>\n<\/ul>\n<ul>\n<li>1% Tax Deducted at Source on Crypto Transfers: U\/S 194S, a Tax Deducted at Source of 1% is applicable on the transfer of virtual digital assets above the prescribed threshold limits<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Crypto_Tax_Calculated_in_India\"><\/span><span style=\"color: #000080;\"><strong>Crypto Tax Calculated in India <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Crypto tax is typically calculated on the profit earned from transferring a Virtual Digital Asset. Gains are taxed at a flat rate of 30%, and eligible transactions may also attract 1% TDS on transfer, subject to prescribed thresholds.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"1_Tax_Deducted_at_Source_on_Crypto_can_be_claimed_Back\"><\/span><span style=\"color: #000080;\"><strong>1% <\/strong><strong>Tax Deducted at Source<\/strong> <strong>on Crypto can be claimed Back: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The Tax Deducted at Source deducted on crypto transactions is not an additional tax. It can be claimed as credit while filing the income tax return.<\/li>\n<li>If the total tax liability is lower than the TDS already deducted, the excess amount may be eligible for refund.<\/li>\n<\/ul>\n<ul>\n<li>Crypto transactions, including swaps and derivative trading, are closely monitored under India&#8217;s tax framework.<\/li>\n<li>Taxpayers should maintain proper records, report transactions accurately in their income tax return, claim available tax deductions at source credits, and seek professional advice where necessary to ensure full compliance.<\/li>\n<li>While this is not an additional tax and can be claimed as credit against your final tax liability, it enables the income tax department to track crypto transactions in real time through exchange reporting mechanisms<strong>.<\/strong><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"No_Set-Off_or_Carry_Forward_of_Losses\"><\/span><span style=\"color: #000080;\"><strong>No Set-Off or Carry Forward of Losses<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The law does not permit losses arising from crypto transactions to be:<\/p>\n<ul>\n<li>Set off against salary, business income, capital gains, or any other source of income,<\/li>\n<li>Any setoff against profits from other cryptocurrencies, or<\/li>\n<li>Carried forward to future assessment years.<\/li>\n<\/ul>\n<p>As a result, taxpayers can still have a tax liability on profitable transactions even if their overall crypto portfolio has incurred a net loss during the year.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Common_misconception_of_crypto\"><\/span><span style=\"color: #000080;\"><strong>Common misconception of crypto<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A common misconception is that tax applies only when crypto is converted into Indian rupees. In reality, any transfer of a virtual digital asset may trigger taxation. Taxable transactions generally include:<\/p>\n<ul>\n<li>Selling crypto for INR or other fiat currency;<\/li>\n<li>Exchanging one cryptocurrency for another;<\/li>\n<li>Using crypto to purchase goods or services;<\/li>\n<li>Transferring crypto in any manner that qualifies as a transfer under the income tax act.<\/li>\n<\/ul>\n<p>Crypto received through mining, staking rewards, airdrops, or as consideration for services is also taxable. Such receipts are generally taxed as income at the time of receipt, and subsequent gains on disposal may attract taxation under the Virtual Digital Assets provisions.<\/p>\n<p>Merely purchasing and holding cryptocurrency does not attract tax. Unrealized gains arising from an increase in market value are not taxable until the asset is actually transferred.<\/p>\n<p>Therefore, tax becomes payable only when the crypto asset is sold, exchanged, spent, or otherwise transferred.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Reporting_Crypto_Income_in_the_Income_Tax_Return\"><\/span><span style=\"color: #000080;\"><strong>Reporting Crypto Income in the Income Tax Return<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Crypto transactions must be reported in the Schedule Virtual Digital Assets of the income tax return. Taxpayers should disclose details of their gains from virtual digital assets during the financial year. The income tax department can reconcile these disclosures with the following:<\/p>\n<ul>\n<li>Information furnished by crypto exchanges,<\/li>\n<li>Tax Deducted at Source reported u\/s 194S; and<\/li>\n<li>Other financial reporting mechanisms.<\/li>\n<\/ul>\n<p>Any mismatch between the taxpayer&#8217;s return and information available with the Department may trigger scrutiny or compliance notices. To ensure accurate reporting, taxpayers should maintain detailed records of:<\/p>\n<ul>\n<li>Purchase and sale dates,<\/li>\n<li>Quantity of assets,<\/li>\n<li>Transaction values in INR,<\/li>\n<li>Exchange statements,<\/li>\n<li>Wallet records, and<\/li>\n<li>Tax Deducted at Source is deducted on transactions.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Foreign_Crypto_Holdings_and_Schedule_Foreign_Assets\"><\/span><span style=\"color: #000080;\"><strong>Foreign Crypto Holdings and Schedule Foreign Assets<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-28885\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/03\/FA-income-.jpg\" alt=\"30k Cr taxpayers Revised their ITR &amp;b Disclosed Foreign Assets, Income\" width=\"747\" height=\"396\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/03\/FA-income-.jpg 747w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/03\/FA-income--300x159.jpg 300w\" sizes=\"(max-width: 747px) 100vw, 747px\" \/><\/p>\n<ul>\n<li>Where crypto assets are held on foreign exchanges or overseas platforms, taxpayers may also be required to disclose such holdings in Schedule Foreign Assets, wherever applicable. With the Government strengthening international information-sharing frameworks and crypto-reporting standards, non-disclosure of foreign crypto assets can significantly increase compliance risks<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Reporting_Crypto_Income_in_Your_Income_Tax_Return\"><\/span><span style=\"color: #000080;\"><strong>Reporting Crypto Income in Your Income Tax Return <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Taxpayers are required to disclose income from Virtual Digital Assets, including cryptocurrencies, in <strong>Schedule <\/strong>Virtual Digital Assets of the Income Tax Return. This dedicated reporting schedule enhances transparency and enables the Income-tax Department to effectively track and verify crypto transactions.<\/li>\n<li>In addition, crypto exchanges and other reporting entities are required to furnish transaction details to the tax authorities, allowing reported gains, losses, and Tax Deducted at Source credits to be cross-verified against taxpayer disclosures. Accurate reporting is therefore essential to avoid notices, penalties, and other compliance issues.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Missed_Reporting_Crypto_Income\"><\/span><span style=\"color: #000080;\"><strong>Missed Reporting Crypto Income?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>If you have omitted or incorrectly reported crypto transactions in your original return, consider filing an updated return for AY 2023-24 or AY 2024-25, as applicable. Voluntary correction of errors can help regularize your tax position and reduce the risk of future scrutiny, penalties, and litigation.<\/li>\n<li>Don&#8217;t wait for a notice. Review your crypto transactions, update your tax records, and file ITR-U wherever necessary to stay compliant and avoid further consequences.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Report_on_Crypto_Held_on_Foreign_Exchanges\"><\/span><span style=\"color: #000080;\"><strong>Report on Crypto Held on Foreign Exchanges: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Resident and Ordinarily Resident taxpayers are generally required to disclose crypto assets held on foreign exchanges or overseas platforms in Schedule Foreign Assets of the Income Tax Return.<\/li>\n<\/ul>\n<ul>\n<li>Contrary to a common misconception, there is no minimum value threshold below which foreign crypto assets can be ignored for disclosure purposes. The often-cited INR 20 lakh figure relates to certain penalty provisions under the Black Money Act and should not be confused with the reporting requirement itself.<\/li>\n<li>Further, with the global focus on crypto transparency and the expected implementation of the Crypto-Asset Reporting Framework (CARF), international sharing of crypto-related information is likely to increase, making accurate disclosure of foreign holdings more important than ever<strong>.<\/strong><\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Reporting_Crypto_in_Schedule_Virtual_Digital_Assets_and_Schedule_FA\"><\/span><span style=\"color: #000080;\"><strong>Reporting Crypto in Schedule Virtual Digital Assets and Schedule FA<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Crypto transactions must be reported in Schedule Virtual Digital Assets of the Income Tax Return. Taxpayers should disclose all taxable gains arising from the transfer of Virtual Digital Assets during the relevant financial year.<\/li>\n<li>Where crypto assets are held through foreign exchanges or overseas wallets, disclosure may additionally be required in Schedule FA. Since crypto exchanges and reporting entities separately furnish transaction details and Tax Deducted at Source information to the tax authorities, the reported data can be matched against the information disclosed in your return. Therefore, accuracy and proper record-keeping are essential.<\/li>\n<\/ul>\n<ul>\n<li>Given the evolving regulatory environment and stringent reporting requirements, taxpayers should seek professional advice from a qualified chartered accountant before filing their returns. Investors should also use only regulated platforms, maintain proper documentation, and invest responsibly after understanding the risks associated with digital assets.<\/li>\n<li>Crypto gains are taxed at a flat 30%, subject to 1% tax deducted at source on eligible transfers; losses cannot be set off or carried forward; and all taxable transactions must be accurately reported in Schedule Virtual Digital Assets. Foreign crypto holdings may require additional disclosure, making proper compliance more important than ever.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Consequences_of_Incorrect_Reporting\"><\/span><span style=\"color: #000080;\"><strong>Consequences of Incorrect Reporting<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>The tax authorities now have access to extensive transaction-level data from exchanges and reporting entities. Failure to report crypto transactions correctly, under-reporting gains, or omitting foreign crypto holdings may result in tax demands, interest liability, monetary penalties, and further scrutiny proceedings.<\/li>\n<\/ul>\n<ul>\n<li>Merely holding cryptocurrency is not a taxable event in India. You are not required to pay tax simply because you own crypto assets or because their market value has increased over time.<\/li>\n<li>Tax liability arises only when a virtual digital asset is transferred through a sale, exchange, swap, or use as payment for goods or services. Until such a transfer takes place, any gain remains unrealized and is not subject to tax.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Penalties_for_Incorrect_Crypto_Reporting\"><\/span><span style=\"color: #000080;\"><strong>Penalties for Incorrect Crypto Reporting: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Failure to report crypto transactions accurately can result in significant consequences. From 1 April 2026, crypto exchanges and reporting entities face monetary penalties for non-compliance with reporting requirements, including daily penalties for failure to furnish prescribed statements and additional penalties for furnishing inaccurate information.<\/li>\n<li>For taxpayers, under-reporting crypto income may attract a penalty of up to 50% of the tax payable on the undisclosed income, while deliberate misreporting can lead to penalties of up to 200% of the tax sought to be evaded. In cases involving undisclosed foreign crypto holdings, much stricter consequences may arise under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015<strong>.<\/strong><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-29556\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/07\/\ud83c\uddee\ud83c\uddf3-GST-on-Crypto-in-India.jpg\" alt=\"\ud83c\uddee\ud83c\uddf3 GST on Crypto in India\" width=\"872\" height=\"1280\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/07\/\ud83c\uddee\ud83c\uddf3-GST-on-Crypto-in-India.jpg 872w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/07\/\ud83c\uddee\ud83c\uddf3-GST-on-Crypto-in-India-204x300.jpg 204w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/07\/\ud83c\uddee\ud83c\uddf3-GST-on-Crypto-in-India-698x1024.jpg 698w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/07\/\ud83c\uddee\ud83c\uddf3-GST-on-Crypto-in-India-768x1127.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/07\/\ud83c\uddee\ud83c\uddf3-GST-on-Crypto-in-India-800x1174.jpg 800w\" sizes=\"(max-width: 872px) 100vw, 872px\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Common Misconception of Crypto taxation in India Crypto Futures Contracts A crypto futures contract is a legal agreement between two parties to buy or sell a cryptocurrency at a predetermined price on a specific future date. These contracts derive their value from the underlying crypto asset and are priced based on market expectations of future &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32718"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=32718"}],"version-history":[{"count":3,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32718\/revisions"}],"predecessor-version":[{"id":32723,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/32718\/revisions\/32723"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=32718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=32718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=32718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}