Intraday Trading Tax for Crypto

khanra17

KF Rookie
Hello, I have a query regarding the taxation of cryptocurrency trading in India. If I were to deposit 1 lakh INR into a cryptocurrency exchange like Binance and participate in both spot and futures trading, resulting in some profits and some losses, I'd like to understand how the taxation process works. Is tax calculated on the individual profits made during trading, or is it applied when I withdraw the funds to my bank account? Furthermore, could someone please explain the current tax regulations for cryptocurrency trading in India, including the potential 30% tax rate and TDS, and how these rules are applicable in this scenario?
 

luciferocious

KF Expert
Hello, I have a query regarding the taxation of cryptocurrency trading in India. If I were to deposit 1 lakh INR into a cryptocurrency exchange like Binance and participate in both spot and futures trading, resulting in some profits and some losses, I'd like to understand how the taxation process works. Is tax calculated on the individual profits made during trading, or is it applied when I withdraw the funds to my bank account? Furthermore, could someone please explain the current tax regulations for cryptocurrency trading in India, including the potential 30% tax rate and TDS, and how these rules are applicable in this scenario?
as per my knowledge its 30% flat + cess on profit earned after transaction whether you withdraw to account or not
 

khanra17

KF Rookie
as per my knowledge its 30% flat + cess on profit earned after transaction whether you withdraw to account or not
Thank you for the information provided earlier. I still can't understand. Just to clarify, if I were to deposit $100 into a cryptocurrency exchange and engage in two futures (intraday) trades, where one trade resulted in a $10 profit and the other in a $10 loss, without withdrawing the funds to my bank account, how would the taxation work in this scenario? Specifically, would I still be subject to a 30% flat tax rate plus cess on the profit, even if I don't withdraw the funds to my bank account?
 

luciferocious

KF Expert
Thank you for the information provided earlier. I still can't understand. Just to clarify, if I were to deposit $100 into a cryptocurrency exchange and engage in two futures (intraday) trades, where one trade resulted in a $10 profit and the other in a $10 loss, without withdrawing the funds to my bank account, how would the taxation work in this scenario? Specifically, would I still be subject to a 30% flat tax rate plus cess on the profit, even if I don't withdraw the funds to my bank account?
Long-term capital losses can be offset against long-term capital profits under existing tax laws. It exempts taxpayers from paying long-term capital gains taxes. However, in the case of crypto revenue, this will not be possible. Losses from the sale of digital assets cannot be offset by other income. It will be treated as a separate class of asset.

I think losses cannot be negated for trades
 

khanra17

KF Rookie
Is this forum is a another version of Quora?

I asked a straightforward question with a clear example, so why am I receiving responses that doesn't even address my question?
 
Thank you for the information provided earlier. I still can't understand. Just to clarify, if I were to deposit $100 into a cryptocurrency exchange and engage in two futures (intraday) trades, where one trade resulted in a $10 profit and the other in a $10 loss, without withdrawing the funds to my bank account, how would the taxation work in this scenario? Specifically, would I still be subject to a 30% flat tax rate plus cess on the profit, even if I don't withdraw the funds to my bank account?

As per taxation law applicable on Indian Exchanges
1% TDS on every sell trade ( Both profit and loss trades )
Flat 30% tax on every sell trade (Profitable trades only )

In your case, its is a foreign exchange, and they are not following TDS Rule, also they are not sharing income data with Indian income tax department, so you are not subjected to pay 1% TDS & 30% tax on gains

After gains if you withdraw cash to your account, then this amount will be considered as regular income until you yourself do not declare it as crypto gains income

Note: Very soon foreign exchange will provide all data to governments, so later tax liability may came with penalties

If above case was on Indian exchange

Then you were liable to pay 1% TDS of total sell trade amount (at selling time ) + 30% of profits made (10$ you mentioned ) so tax is ( 3$ at the income tax filling time )

Hope this clarifies you query
 
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