Crypto Tax Calculator
Crypto Tax Calculator
Crypto taxation guide 2023
Explore our Crypto Tax Calculation Series by Mudrex! Get answers to your burning questions about crypto taxation in India 2023 in this comprehensive video playlist. Your complete guide to filing crypto taxes with ease.
What Is Cryptocurrency Tax?
The Indian government recognizes crypto as a “virtual digital asset,” (VDA) among other blockchain assets like NFTs and other virtual assets. This means these assets can act as a store of value and can be used in investments and transactions.
This also means that any profits you realize from these assets are taxable, and the tax you pay on your crypto assets is cryptocurrency tax.
How Is Cryptocurrency Taxed?
The crypto tax regime introduced in February 2022 states that a flat rate of 30% is applicable on profits realized from crypto assets, allowing for no deductions except for the cost of acquisition.
Additionally, the individual will also owe a surcharge (if applicable) and a cess of 4% on the tax, along with a 1% TDS (tax deducted at source) applicable on all crypto transfers.
Learn from the experts
Learn how your cryptocurrency investments will be taxed, how you can optimize your taxes while staying compliant with Indian regulations here
Discover valuable insights from experts on optimizing your investment planning and crypto tax filing for this year's IT returns.
Crypto Tax Calculation: Will You Have to Pay Tax on Both Gains and Losses From Crypto?
According to the latest crypto tax act, you are liable to pay taxes only on your crypto profits. If you face losses in your crypto sales, you need not pay taxes on these sales.
But can you use the loss from one crypto to set off against the profit from another crypto to effectively reduce your taxable income? Simply put, no. You will have to pay taxes on all your profits realized from crypto assets, irrespective of the losses you incurred from other crypto assets.
Say you buy Bitcoin for ₹10,000 and sell it for ₹15,000. On the other hand, you also buy Ethereum for ₹10,000 and sell it for ₹8,000. You cannot offset the loss of ₹2000 against the ₹5000 profit you made to effectively pay taxes on a net ₹3000 profit.
You will not have to pay taxes on the Ethereum sale, but you will have to pay taxes on the entire profit margin from the Bitcoin sale.
How to Use Mudrex Cryptocurrency Tax Calculator?
1. Enter the entire amount received from the sale of your crypto assets.
2. Enter the initial investment amount (no deduction benefits are available except for the cost of acquisition)
3. Your net profit will be displayed on your screen along with the tax you are liable to pay, as per the provisions of section 15BBH
What are the benefits of using Mudrex Cryptocurrency Tax Calculator?
It applies all relevant tax provisions and gives you an accurate answer every time, leaving no room for human error.
It is user-friendly and allows all investors to calculate their taxes, even those who may not have complete knowledge of the tax levied on cryptocurrencies.
It is free to use, and it saves you valuable time that you could be using to make more investments and grow your wealth.
How Can I Reduce the Tax I Pay?
There is one way to save on crypto taxes, and that is investing your profits in stablecoins. When you exchange other crypto assets for stablecoins, you will pay a 1% TDS during the exchange. With this, you also secure your investment in the long term. And you only have to pay the flat 30% tax when you cash in your stablecoins for fiat currency.
Unlike other crypto, stablecoins have their value pegged to real-world assets like fiat currency, taking volatility out of the equation. For example, USDT’s value is tied to the US Dollar; 1 USDT = 1 USD. So practically speaking, there is almost no chance of you incurring a loss in the long term by investing in them.
FAQ about Crypto Tax Calculator
Have a question that is not answered? You can contact us at help@mudrex.com
