Generally, if any investor in India wants to invest in cryptocurrency or wants to trade, then one thing definitely comes to his mind that the Indian government levies very high tax on crypto, due to this thought, he is not attracted towards cryptocurrency.
Apart from this, the statements given by the Prime Minister and the Finance Minister on crypto also do not motivate crypto investors.
Therefore, in today’s article we will try to explain to you how much tax is levied on cryptocurrency and how you can pay it.
How much tax is levied on crypto currency investment in India
Before you know how to pay tax on cryptocurrency, we will tell you how much tax is levied on cryptocurrency investment
Basics of crypto tax.
First of all, let us understand the rules made by the Government of India regarding tax on crypto in the year 2022 and in the budget of 2025.
30% tax on profit.
If you sell crypto in the market and you make profit on it, you will have to pay 30% direct tax on it
1% TDS –
If you transact crypto for more than Rs 50,000 (or Rs 10,000 for some tax payers), 1% TDS is deducted
There will be no adjustment of losses
If you are incurring losses while trading in crypto, there will be no adjustment against other profits
Crypto Gift
If crypto is gifted to you by someone other than your relatives, it will be taxed and considered as a source of income.
Understanding Taxation on Crypto with Example
Before calculating tax on crypto, you need to calculate the transaction
Suppose you have bought one bitcoin for Rs 20 lakh and then sold it for Rs 30 lakh, thus your capital gain becomes Rs 10 lakh, now you will have to pay 30% tax on this Rs 10 lakh
1000000 profit× 30% tax = 30000
Suppose you have sold crypto worth ₹500000, then the exchange will deduct one percent TDS from you, that is, your ₹5000 will be deducted as 1% TDS.
You can claim this TDS while filing ITR
How to pay crypto tax
Step 1 -Visit the Income Tax e-Filing Portal.
Step 2- Log in using your PAN and password.
Step 3- Navigate to e-Pay Tax > New Payment.
Step 4- Select Advance Tax/Self-Assessment Tax.
Step 5 -Enter the amount and choose Challan 280 for payment.
Step 6- Complete the transaction via net banking, UPI, or debit card
Step 7- Submit TDS Claims While Filing ITR
Since 1% TDS is already deducted on crypto transactions, you can claim it as tax credit while filing your ITR.
Penalty for not paying tax on crypto
If you do not pay tax on crypto, then you may have to pay a penalty of up to 70% of your total tax. Also, if you have not paid TDS, then you will be charged interest of 1.5% on your TDS every month.
Conclusion
Paying crypto taxes in India is now a legal requirement. It is also important for you to do so so that you can keep your crypto investments safe and continue crypto trading for a long time
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