The Income Tax Department (ITD) has clarified that all income earned from crypto is taxable in India.
They’ve sent tax demand notices to investors who have yet to report their crypto activity. This means accurately reporting your crypto gains and income and paying any taxes due is crucial to avoid penalties.
However, with the need for more guidance around crypto tax, many of you need clarification on how to pay crypto tax in India or how to show crypto income in ITR.
Relax! This guide will answer all your questions and show you how to report crypto to the ITD and pay your taxes in under 10 minutes using the powerful KoinX platform.
We’ll walk you through logging in to KoinX, generating your tax report, and then heading to the income tax website to file your crypto taxes easily.
Sign Up And Connect To KoinX
To start the answer of “how to file crypto tax in India, ” first sign up or log in to KoinX, one of India’s most trusted cryptocurrency tax calculators.
KoinX supports integration with over 270 platforms. So, connect all the exchanges, wallets, and blockchains you use to our platform. Refer to our integration blogs for detailed instructions on integrating exchanges, wallets, and blockchains.
Once everything is connected, KoinX will display a detailed portfolio overview of capital gains, losses and income. It automatically categorises such transactions based on the nature of its activity.
Download Your Crypto Tax Report
Once you are in and have integrated your account, it’s time to download your crypto tax report. You will have to buy our payment plans based on the number of transactions you have accounted for in the said financial year.
Our bundle plan is your ideal solution if you have multiple income sources or a substantial number of crypto transactions. This comprehensive plan generates a detailed crypto tax report and includes personalised ITR filing assistance from a dedicated tax professional.
Imagine having an expert by your side, ensuring every detail is accounted for correctly and maximising your potential savings. With the bundle plan, you can navigate the complexities of crypto taxation confidently and efficiently, knowing that you’re in capable hands.
Once you have the plan, you can download your tax report by clicking on Taxes and then ‘Generate Crypto Tax Report.’ Before you do so, let’s first understand its content.
Contents Of The Tax Report
The KoinX Tax Report contains nine distinct sections. All sections contain a guide on filing the ITR reports yourself. A brief overview of all the sections is given below:
1. Capital Gains Summary
It’s a detailed overview of profit and loss from crypto trade transactions such as swaps and spot trading in a financial year.
It contains details such as:
- Number of Transfers– It displays the total number of taxable transactions made in the financial year.
- Sale Consideration– It’s the total sale consideration received during the year from the transfer of capital gains to applicable crypto assets.
- Cost of Acquisition– Total cost incurred to purchase these crypto assets.
- Taxable Capital Gains before losses and expenses– Crypto profits that are subject to taxation.
- Losses– Gross loss from all crypto transfers during the year.
It also reports the amount of TDS (Tax Deducted at Source) deducted by various exchanges.
2. Futures Incomes Summary
This comprehensive report summarises the profits and losses from crypto derivatives, including futures and options.
The report includes the following information:
- Total Realised Futures Profit during the year– The combined profits from all futures transactions over the fiscal year.
- Total Realised Profit from Losses– The losses incurred through realised profits from all futures trades conducted within the financial year.
- Total Futures Turnover for the Financial Year – The calculation of futures trading volume for financial reporting, per the guidelines outlined by the Institute of Chartered Accountants of India (ICAI) in their Guidance Note.
3. Other Incomes And Expenses Summary
This section summarises all the income from airdrops, rewards, interest earned from staking, loans or funding, and other miscellaneous sources. It also includes a summary of all fee and funding transactions, like gas fees, paid throughout the financial year.
4. Schedule VDA Report
The latest ITR forms now have a dedicated section known as Schedule Virtual Digital Assets (Schedule VDA), where you can provide details of your VDA for a financial year. This section in your KoinX account contains information regarding acquisition and sale dates, sale value, acquisition cost, and profit amount (or zero if there was a loss) to help you file the Schedule VDA Report in ITR forms.
5. Asset Wise Summary
It summarises coin-wise profit and loss amounts for a certain year. It contains:
- Name of Asset– It displays the name of the coin.
- Gross Profit– This refers to the net profit of a specific coin.
- Gross Loss– This refers to the net loss of a specific coin.
- Net Taxable Profit– This refers to the amount of profit gained subject to taxation.
6. Capital Gains Transactions
Unlike the capital gain summary, this section provides a comprehensive list of all capital gains transactions within a specific financial year. It includes the exact amount of profit or loss for each transaction.
7. Futures Transactions
This is a comprehensive record of futures, options and other related derivatives transactions, including the overall profit or loss for a specific fiscal year. Unlike the futures income summary, this section lists all transactions in that year.
8. Other Incomes Transactions
While Other Income Transactions provides a detailed income report from other sources, the Other Incomes Transactions section is a detailed list of all miscellaneous income transactions, which may include airdrops, rewards, staking, and other types of income.
9. Data Sources
This is an extensive list of all the sources used to extract data for the tax report.
The KoinX crypto tax report provides a user-friendly and efficient solution for individuals who need to file their taxes related to cryptocurrency transactions. With its comprehensive features, including automated data importing and accurate reports, KoinX simplifies crypto taxation and ensures compliance with the necessary regulations.
Log Into The Income Tax Portal And Start Your ITR-2
If you have chosen to self-file your ITR, you must register or log in to your account on the Income Tax website. Once you are logged in, obey the following steps:
Step 1: Head to the home page and choose the “e-file” option
Step 2: Click “Income Tax Returns” and select “File Income Tax Returns.
Step 3: Then, choose the assessment year as 2025-26 (current AY for FY 2024-25)
Step 4: Pick the Online mode of filing and click Continue
Step 5: Click on “Start New Filing.”
Step 6: On the next page, choose your status as “Individual” and then hit Continue.
Step 7: Under the section “I know which ITR Form I need to file,” select “ITR-2. You can read our guide here if you don’t know which ITR to file.
Step 8: Proceed to the next page and click “Let’s Get Started.”
Step 9: Based on your circumstances, provide your reason for filing an ITR, then click “Continue.”
Step 10: Find the “Select Schedule” heading on the following page and choose “Income.”
Step 11: Scroll down, check the box next to “Schedule VDA,” and click “Continue.”
Report Your Capital Gains In Schedule VDA
Here’s how to report your capital gains in Schedule VDA:
Step 12: After selecting “Schedule VDA,” click “Add Another” on the next page.
Step 13: On the next page, you must enter the details for each crypto trade to add them to Schedule VDA. You may need to repeat these steps multiple times to cover all your transactions.
You can find the necessary information in your KoinX Capital Gains Tax Report. The column names used in the KoinX report are included in brackets for easy reference:
- Date of acquisition (Date Purchased)
- Date of Transfer (Date Sold)
- Head of Income (This asks whether you have capital gains or business income and will depend on your financial circumstances)
- Cost of Acquisition (Purchase Value)
- Consideration received (Sale Value)
Step 14: Once you have entered the above details of a particular transaction, click “Add” to add it to your profile. Follow the same for the rest of the transactions.
Note: After you’ve entered all your transactions with the relevant information, the Income Tax Portal will automatically calculate your profit and loss.
Step 15: After reviewing your figures and ensuring all information in your Schedule VDA is accurate, select “Confirm” to complete this section.
Report Other Income From Crypto
If you have any other crypto income from mining, staking, or farming, you must report it in a different section of the ITR. For that, you need to follow the given steps:
Step 16: Choose “Schedule Income from Other Sources” on the schedules summary screen.
Step 17: Select “Gross Income Chargeable to Tax at Normal Applicable Rates” and click “Add Details.”
Step 18: For the nature of income, select “Any Other Income” and then add the details
Step 19: On the following page, specify the nature of income as “Crypto Income” and enter the amount. Enter the total amount from the tax report’s ‘Summary of Other Incomes’ section.
Complete Your Other Required Schedules
Step 20: After completing the above schedules, fill in any other required schedules based on your circumstances and income and deductions for the financial year.
Proceed To Verification
Step 21: To finalise, click on “Proceed for Verification.” You’ll then have the chance to review your completed ITR before submitting it when you’re ready.
After submitting your ITR, you will need to e-verify it. This involves requesting an OTP sent to the mobile number linked to your Aadhaar card.
Once your return is e-verified, your filing process is complete! After submitting your ITR, the ITD will notify you of any tax obligations related to capital gains or income, along with instructions on how and when to make payments—all accessible through the income tax portal.
Conclusion
By following these steps and leveraging KoinX, you can transform the crypto tax filing process from a headache to a breeze. This user-friendly platform simplifies tax calculations and report generation, saving you valuable time.
Remember, timely and accurate tax filing ensures compliance and avoids future penalties. With KoinX, you can confidently navigate the world of crypto taxes and focus on what truly matters: growing your crypto portfolio.
Frequently Asked Questions
How Much Tax Do You Pay On Cryptocurrency In India?
In India, cryptocurrency gains are taxed at a flat rate of 30%. This applies to all profits from selling or trading crypto assets, regardless of the holding period (short-term or long-term).
It’s important to note that losses from crypto transactions cannot be offset against income from other sources.
Additionally, within a financial year, a 1% Tax Deducted at Source (TDS) applies to all crypto sales exceeding INR 50,000 (or INR 10,000 in specific cases).
How To Pay Crypto Tax In India?
To pay taxes on crypto, include your crypto holdings in your ITR. After reporting your crypto, the ITD will notify you of any taxes owed and provide payment options through your Income Tax Portal.
Where To Show Crypto Income In ITR?
The Income Tax Department has introduced a new schedule called “Schedule Virtual Digital Assets (VDAs)” in the ITR forms for FY 2024-25 onwards. This is where you’ll report all your crypto income, including gains from sales, mining rewards, airdrops, and staking income.
Make sure to accurately record details like the date of acquisition and disposal, the cost price, the sale price, and the nature of the income (sale, mining, etc.) from the KoinX tax report for each crypto transaction.
When To Pay Crypto Tax In India?
Crypto tax filing in India follows the same deadlines as regular income tax filing. You’ll need to file your ITR, including your crypto income, by the due date specified by the ITD each year.
The deadline is typically 31 July each year. Remember, any TDS deducted from your crypto sales will be reflected in your Form 16 and pre-filled in your ITR.
Don’t wait until the last minute – join KoinX to generate your tax report well before the deadline to ensure a smooth filing process.
