How are cryptocurrencies taxed in India?

financialexpress.com:

Question: I am a taxpayer regularly investing in cryptocurrencies and Non-Fungible Tokens (NFTs). Please guide me on the tax implications applicable on sale of such investments made in cryptocurrencies.

Answer by Dr. Suresh Surana, Founder, RSM India: Any income derived from transfer of any virtual digital assets such as cryptocurrency and NFTs would be subject to tax at a flat rate of 30% plus applicable surcharge and cess. However, the taxpayer would not be able to claim any deduction in respect of any expenditure (other than cost of acquisition) or set off of loss while computing income from transfer of such assets.

It is pertinent to note that the loss incurred from any Virtual Digital Asset would not be allowed to be set off even against profit of other Virtual Digital Asset i.e. Intra head adjustment between VDAs is also not possible.

For instance, a taxpayer cannot set off losses incurred from cryptocurrency against profits derived from NFTs even though both crypto and NFTs fall within the definition of VDA.

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Further, the taxpayer would receive the net amount post deduction of withholding tax u/s 194S of the IT Act, wherein the transaction amount exceeds a monetary threshold and subject to certain other conditions.

The taxpayer indulging in such sale of cryptocurrencies and Non-Fungible Tokens (NFTs) would be required to furnish the details of such transaction in Schedule VDA in their tax return which requires details such as purchase and sale date, acquisition cost, consideration received etc.

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Disclaimer: The views and facts shared above are those of the expert. They do not reflect the