๐งพ Taxation & Legal Guidance in Cryptocurrency
๐น 1. Is Cryptocurrency Legal?
Globally: Legal status varies by country:
- โ Legal & regulated: USA, EU, Canada, Japan, South Korea
- โ Restricted: China, Nigeria
- โ๏ธ Developing: India (not illegal, but not yet fully regulated)
In India: Trading/holding is allowed, but not recognized as legal tender by RBI. Taxed under special provisions.

๐น 2. Crypto Taxation in India
๐ Capital Gains Tax (30%)
- Flat 30% tax on profits from selling crypto
- No deductions other than acquisition cost
๐ 1% TDS (Tax Deducted at Source)
- Applies to trades above โน10,000
- Deducted at the time of sale/transfer
๐ No Set-Off of Losses
- Crypto losses canโt be set off or carried forward

๐น 3. Reporting in ITR
Crypto gains must be reported in Income Tax Returns:
- Capital Gains (for casual investors)
- Business Income (for active traders)
- Use Schedule VDA in ITR-2 or ITR-3

๐น 4. GST on Crypto
No official GST on crypto trades, but services like mining or wallet apps may attract 18% GST.

๐น 5. Taxation in Other Countries
Country | Tax Status | Tax Rate |
---|---|---|
USA | Property Taxed | 10%-37% |
UK | Capital Gains Tax | 10%-20% |
Germany | Tax-free after 1 year | 0% |
Singapore | No capital gains tax | 0% |
Australia | Capital Gains Tax | Up to 45% |
๐น 6. Legal Compliance Tips
- โ Use KYC-compliant exchanges
- โ Maintain detailed trade and wallet records
- โ Report accurately in tax returns
- โ Avoid unregulated P2P platforms
- โ Donโt hide large gains from authorities

๐น 7. When to Get Legal Help
Consult a tax lawyer or CA if you:
- Have complex or international holdings
- Stake, mine, or earn crypto
- Run a crypto business or exchange
- Receive a tax notice

๐น 8. Future Regulation Outlook
India is working on a comprehensive crypto bill, which may introduce licensing, DeFi rules, and a digital rupee (CBDC).
โ Summary Table
Topic | Key Points |
---|---|
Legal Status | Allowed but not regulated in India |
Tax in India | 30% gains, 1% TDS, no loss set-off |
ITR Filing | Use ITR-2 or ITR-3 with VDA Schedule |
Record Keeping | Maintain detailed transaction logs |
Legal Help | CA or lawyer for complex matters |