| arbique - Delhi, National Capital Territory of Delhi - Sep 25, 2025 |
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message arbique about this ad How Indias Tax Rules Affect Crypto Traders Introduction Indias cryptocurrency market has seen exponential growth over the last few years. Millions of traders and investors are exploring digital assets, but the governments tax regime has created a complex landscape. While crypto is not banned, the taxation structure in India is among the toughest worldwide. For traders, this doesnt just impact profitsit determines whether trading strategies like arbitrage, high-frequency trading, or AI-powered automation (such as Arbique) can remain viable. In this blog, well explore Indias crypto tax rules, their impact on traders, and how platforms like Arbique help navigate this challenging environment. The Current Tax Regime for Crypto in India 1. Flat 30% Tax on Gains All profits from trading, investing, or selling cryptocurrencieslegally defined as Virtual Digital Assets (VDAs)are taxed at a flat 30% rate. No benefit from lower income slabs. No deductions allowed (except the cost of acquisitionTax applies equally to short-term and long-term gains. This significantly reduces net profitability for active traders and arbitrageurs. 2. 1% TDS on Every Transaction Alongside the 30% tax, India mandates a 1% Tax Deducted at Source (TDS) on every crypto trade, regardless of profit or loss. For frequent traders: This locks up liquidity. Capital efficiency drops. A digital paper trail is created for each transaction. 3. No Loss Offsetting Unlike other asset classes, losses in crypto cannot be set off against gains. Example: If a trader loses 1 lakh in Bitcoin but gains 50,000 in Ethereum, they still owe tax on the 50,000 profit. 4. Reporting & Compliance Every transaction must be declared in income tax filings. Exchanges must register under FIU-IND and comply with PMLA KYC/AML rules. message arbique about this ad |