Mudrex Earn lets you generate passive income through staking. But in India, these earnings are taxable under Virtual Digital Asset (VDA) rules. Here’s how your Mudrex Earn rewards are taxed.
Mudrex Earn allows users to earn rewards on their crypto holdings by participating in staking and lending activities directly through the Mudrex platform. Users can select from a list of supported coins and allocate their holdings to generate additional returns.
Mudrex Earn offers:
This user-friendly approach simplifies the process of earning passive income from crypto assets, making it accessible even to those new to the crypto space.
Read this blog for an overview on how to use the earn feature on the Mudrex.
Annual Percentage Rate (APR) on Tokens
Mudrex Earn offers users the opportunity to earn an Annual Percentage Rate (APR) on their crypto holdings. APR represents the annualized interest rate without accounting for compounding. The APR varies depending on the specific token and prevailing market conditions. For instance, certain tokens may offer APRs ranging from 0.023% to as high as 19.41%, providing users with the flexibility to choose options that align with their investment goals.
By participating in Mudrex Earn, users can passively grow their crypto assets, benefiting from daily interest accruals without the need to actively trade or sell their holdings. This feature is particularly advantageous for those looking to maximize returns on idle assets while maintaining liquidity and control over their investments.
In the Union Budget of 2022, the Indian government introduced clear guidelines for taxing cryptocurrencies, classifying them as Virtual Digital Assets (VDAs). Here’s a snapshot of the key rules:
These provisions have brought greater clarity and structure to how crypto investments are taxed in India.
👉 For a complete breakdown and detailed examples, check out our full blog on Crypto Taxation in India.
Earnings from Mudrex Earn through staking, fall under the purview of the aforementioned tax regulations. Here’s how:
Rewards received from staking or lending activities are considered income and are taxed at a flat rate of 30%. This applies regardless of whether the rewards are received in the form of additional tokens or any other benefits. The fair market value of the rewards at the time of receipt is considered for taxation.
If the crypto assets earned through Mudrex Earn are later sold or transferred, the gains from such transactions are also subject to a 30% tax. The cost of acquisition in this case would be the fair market value of the asset at the time it was received as a reward.
A 1% TDS is applicable on the transfer of VDAs exceeding ₹50,000 in a financial year for individuals (₹10,000 for specified persons). This TDS is deducted at the time of transfer and is applicable to both the sale of earned crypto and the transfer of crypto assets used in staking or lending.
| Particulars | Amount (₹) |
| Sale Value | ₹30,000 |
| Cost of Acquisition | ₹12,750 |
| Capital Gain | ₹17,250 |
| Tax on Capital Gain (30%) | ₹5,175 |
| Health & Education Cess (4%) | ₹207 |
| Total Tax Payable | ₹5,382 |
It’s imperative for Mudrex Earn users to maintain accurate records of all transactions, including:
These details are essential for accurate tax reporting and compliance. Mudrex facilitates this by providing detailed transaction histories and has collaborated with ClearTax to offer comprehensive tax statements, simplifying the filing process for users.
While Mudrex Earn offers an excellent opportunity to generate passive income from crypto holdings, it’s crucial for users to be aware of the tax implications associated with such earnings in India. By understanding the taxation framework and maintaining diligent records, investors can ensure compliance and make informed decisions to optimize their crypto investment strategies.
Disclaimer: The information provided in this article is for educational and informational purposes only. Nothing contained herein should be construed as financial, legal, tax, or investment advice. All content, opinions, and views expressed are solely for general information and do not constitute an offer to buy or sell any securities or financial instruments. Tax laws and regulations vary by jurisdiction and may change over time. Cryptocurrency taxation is complex and subject to interpretation. We strongly recommend consulting a qualified tax professional or financial advisor to understand the tax implications specific to your circumstances.
Anush is a crypto researcher dedicated to making blockchain insights clear and accessible. A proud Solana maxi who still appreciates a good Layer 2 debate, he dives deep into market trends so others don’t have to (but really should). Passionate about simplifying crypto, he strives to make the space less intimidating and a lot more relatable, one report at a time.
