Tax on Crypto? Legality & Taxation Explained

Friends, people search on the internet whether crypto is legal in India or not. This is the first point. The second point that comes to people's mind is that even if I invest in crypto currencies , put in money and make a profit. Suppose you bought Bitcoin and you made profit in Bitcoin, then how much tax will be levied? If I trade, say in Solana, in Ethereum, I trade in futures and options, then how much tax will be levied? And the biggest question is, if I suffer a loss, do I get any benefit? Do you get any benefits? Yes, today in this video we are going to clear all your questions related to the legality and taxation of crypto currencies and this will be the simplest video on the entire internet in which you will understand the entire taxation of crypto in just 5 minutes in a single video. Now first of all let us talk about whether crypto is legal in India or not. Don't ask me. We ask Google. Is crypto legal in India? So the answer you will get is yes crypto currency is legal to buy, sell and hold in India. However it is not recognized as a legal tender. Now what is legal tender? Legal tender means that you cannot legally use it to pay for goods, services, and wages. Suppose someone's salary has to be paid. So it is not like that. You will say, friend, take your salary in Bitcoin. You will have to pay in rupees, right? So that's why it is not legal tender. The 500 rupee note that you have in your pocket is legal tender. So here the government clearly says that crypto currencies are digital assets. So the Indian Government calls it VDA. VDA stands for Virtual Digital Assets and is also being regulated. Now the second thing is that if you make profit on crypto currencies, then 30% tax is levied as capital gains tax. We will discuss this also. Now listen, 30% tax is being levied. Think about it, is there any tax on any illegal thing ? Let me give you an example. Is there any tax on drugs in India? You will say that drugs are illegal. That is why there is no tax on it. You bought an iPhone. You paid GST. Why did you pay GST? Because buying and selling iPhone is legal. In this manner, if the government is collecting tax then the point of legality ends here. Secondly, TDS is also deducted. Now keep listening to this TDS. I will clear it up. Ok ? Because trading futures and options is different. Spot trading is different. So if you do any transaction in crypto, after buying crypto you sell or transfer crypto, then TDS of 1% is deducted in it. Thirdly, any crypto exchange in India will have to be FII compliant. This means that one will have to comply with the Financial Intelligence Unit of India and follow the rules of anti-money laundering. KYC will also have to be done. Let me give you an example. Today you are interested in cryptocurrencies. You go for examples. I also turn on screen recording of the phone. So that's what I'm talking about, you'll be able to see. So this platform is Coin DCX. First of all, it is an FIU compliant platform. As I told you, this is FIU. Now all the things will have to be covered practically. So now you keep watching. It also follows anti-money laundering rules and KYC is also done. If you open an account on this, KYC will also be done. First of all let me tell you one thing. All those who are interested in crypto, you can go to the CoinDCx platform and invest , trade and also do SIP. This poster that you are seeing on the screen is a SIP poster that SIP is also happening inside crypto. I'll show you how it's going. So you guys can open an account on Coindix through the link I am giving below in the description and print comment. Now if you guys go through my link below and open an account on Coindix, then you should also get the benefit. So the benefit is that if you open an account and go there and do any transaction, you will get free crypto from Coin DCX and you will also get free bitcoins in crypto. So you can open your account through the link given below. After doing any transaction you will get free crypto. So thank me later I told you now. Now we understand that you will say that this did not happen, crypto was banned in India before 2020, then the ban was lifted. So let me first explain to you what happened. The Supreme Court of India and the Reserve Bank of India had said that since people are trading in crypto, there was a little risk here according to them. Therefore, RBI had asked banks not to deal with crypto platforms. But then the Supreme Court intervened. And the Supreme Court passed a judgment in which they said that the previous banking ban was not completely banned. So RBI did not ban crypto in India. Only the private banks were told not to deal with any crypto platform right now. So that ban was lifted in 2020. Which opened the way for trading. Along with this, what the Madras High Court said was that this crypto currency is like property for us. So if you are investing in crypto currencies, you are doing it just like you invest in property. Just like you are charged capital gains tax on property, the same is applicable here. So the Madras High Court recognized that crypto currencies are your property under Indian law. So now let us talk about the various ways in which tax is levied. So now we will understand one by one and that too practically. First of all let us talk about income classification. If you make money by investing in crypto. So see, if you trade in options then you are paying zero brokerage. Meaning, if you trade in call put, then there is zero brokerage and you can start trading from ₹100. Now you see here we will talk about options. First of all, when I searched Bitcoin, look, many things came up. First of all, look up, it says coins. This coin, this Bitcoin, is called a virtual digital asset. But what came down is BTC USDT, this is not your VDA. This is the difference. So if you buy Bitcoin. Suppose Bitcoin is currently trading at 65 lakhs. Now after going here, I clicked on buy here. Ok? Now suppose I buy Bitcoin worth ₹100 here. For example, I have shown you this Bitcoin worth ₹100. This is what I swiped to buy. This is my bye. What is he saying now? What I am trying to tell you about the offers in this is that the trading fees on commodities have been reduced by 80%. That fee is now just 0.01%. Meaning if you trade in gold, crude oil , silver, natural gas. You will say that one can trade in all this on the DCX platform. Exactly [music] you can. Now trading is a little different. Now look how I said goodbye here. In this way, it is possible that someone may buy anything like Rs 1 lakh, Rs 10 lakh, Rs 5 lakh. Now from here this Bitcoin which I bought at 65 is gone. Let's say I sold another 70 lakh from here. So whatever profit I make, I will be charged a flat tax of 30% on that profit. A cess of 4% will be levied and a surcharge will also be applicable. You will say, brother, have you gone mad? I will pay 30-30% tax. Then I will tell you the alternative. Ok? Secondly, if you do not sell it then there is no tax. Ok? If you don't sell it, there is no tax. There are some people who are sure. They think, man, I believe in crypto, I want to invest. So you can also do SIP here. You can also do SIP from ₹500, ₹1000, ₹2000. This thing is also available for you here. Now look when I search BTC again. It is written here futures. Now, this is the futures, here the game changes. I say if you want to buy then click on BTC. There is trade here. You say we are trading. Hey brother, look, you don't get leverage in trading. It is written here, make it 10x, now if you make it 1x and confirm it, then what will happen now? Now if you buy here and then sell it after making profit, then 30% tax will not be levied. What are you talking about, friend? From here, almost if you look, the rate is coming in dollars. This is called the rate of BTC, what is it in USDT? So that's coming in around 64,000. Now you will say why there will be no 30% tax on futures? Let me explain to you. Now look very carefully. If you trade in futures, then this futures is not Bitcoin. This is Bitcoin USDT. And here it is written trading. You are trading. So the government tells the trading community not to buy this property or that. This was just trading. So the government has given its term as speculative business income. And the tax on this is not 30%, friends. Tax is levied on this according to your individual slab rate. So if you fall in the 5% slab then it is 5%, if you fall in the 30% slab then it is 30%, if your CA says that brother you are not taxed then you do not have to pay any tax. Speak more. This means you should understand that there is no tax on small profits. But if you buy and sell Bitcoin on the spot, then you fall in the category of any income, sorry individual tax rate, you will have to pay 30% flat tax there. So it's not good enough that you can trade and you can hold. Now let's move on to the second new thing, TDS is also applicable on Bitcoin. Meaning if I go back again, like you will go to invest and after going to invest you will go to Bitcoin. Now if you buy, sell or transfer here, then you will be charged 1% TDS. Ok? All applicable transactions in which you sell or transfer. But here when you trade, when you go to futures, you are not charged any TDS in any way for trading here. Along with this, understand that if you buy it, you buy it at Rs 64 lakh, Rs 65 lakh or at any rate. Here, what will happen if you have given the cost of acquisition ? For example, if you bought it for Rs 65 lakh and sold it for Rs 70, then it will become 70 - 65. This is your deductible, meaning you can say that only the acquisition cost will be deductible. Even if you don't understand, just understand that tax will be levied on profit. But things are different here. If I traded, I removed it. I went to trading. Now let us assume that I made a profit of ₹1 lakh by trading. You will say that you will have to pay tax. I will say I will not pay tax. You will say why won't you give? So I will say that my brokerage is applicable. The internet is coming here. I have installed Wi-Fi. I have a Wi-Fi bill of Rs 2000. I will cut that too. Apart from that, suppose you had taken advice from someone. He was serviced. I say brother, I trade through phone. I bought this phone for trading. This is a phone worth ₹1.5 lakh. On the contrary, I am in loss of Rs 500. There was a profit of only Rs 1 lakh. There was a profit of Rs 1 lakh. It is a phone worth ₹1.5 lakh. So I am in loss of Rs 500. I am not paying tax to him. And the government will say okay. You will say that the government will say so. Yes. Because you will say I am trading through phone. You bring a computer worth ₹2 lakh. You and I trade from a computer. So you have submitted its bill in your income tax and show it to your CA. So what will happen? The CA himself will say that brother, you earned ₹1 lakh. You spent ₹2 lakh on your computer. You are in loss of Rs 1 lakh. Hey, our investment is ₹35 lakh. So how did the loss of ₹36 lakh occur? So no tax is paid even after making profit. So you can minus your business expenses. But remember, you cannot do this in spot trading only when trading futures and options. Apart from this, loss is not offset brother. Suppose I bought Bitcoin for Rs 65 lakh. Bitcoin went down to 60 lakhs. Now I cut it off. I need money. I cut it at Rs 60 lakh. And I suffered a loss in that. Let's assume I have suffered a loss of Rs 5 lakh. So the loss of Rs 5 lakh is a pure loss. Pure loss will be deducted from my capital. But if I suffer loss in trading, there is no problem. Suppose I made a loss in trading and let us assume that I taught trading to someone and took ₹10,000 for teaching, then my income was ₹10,000 and I incurred a loss, say of ₹10,000, then my net worth will be zero. So if you are making profit in any kind of business or if I made a loss today and made a profit tomorrow, then it will be offset. There is no offset here either. So I don't talk to anyone on the spot. You must have heard from my mouth that I generally say that you can trade in crypto through futures and options. There are a lot of opportunities. But if you go and see my holdings, you will not find anything in the portfolio. I have just bought a sample for ₹100 and shown it to you. Otherwise there is nothing. Meaning I don't hold much in crypto. Apart from this, let's talk about loss carry trades. If you incur a loss in buying crypto, then brother, it is a complete loss and it will lapse in a year. Let's assume I suffered a loss in trading this year. Let's assume there is a loss of Rs 10 lakh. You will say it is a huge loss. So do you know what I will do? I will tell the government that I have suffered a loss of Rs 10 lakh. My speculative business suffered a loss. Ok? So the government will say, okay, you have filed it in the ITR. Now next year I made a profit of Rs 12 lakh. So I have to pay tax only on income of ₹ lakh. Yes. Because if I make a profit of Rs 10 lakh next year and a profit of Rs 12 lakh last year and there was a loss of Rs 10 lakh, then the loss will be minus and you can carry forward the loss for four years. So suppose you suffer losses for one or two years. People are not profitable in the beginning. So when you become profitable, you will first deduct the losses you have incurred and then you will have to pay tax on the profit made on the remaining income. You will say, friend, this is amazing. And in the same way, the requirements of ITR are also slightly different. For this you should talk to the CA once. But here, if you earn more money, then an audit report may also be required. Your CA will guide you. Basically you have to understand that if you are trading in futures and options then taxation is easier for you. If you have understood this today, then you can take advantage of it by going to the Coin DCX platform. Coin is fine on dcx. If you want to invest, then you can invest in any coin. Suppose you think I should buy xRP too. You can buy any coin. The second thing that is most important for you here is trading. You can trade in futures and options. Look at the future, there are so many coins and the momentum here is huge. Look, it went up 7%, it went down 25%. You will say it fell down. Hey friend, this is the benefit of futures that if I want to trade then why do I have to go long ? Meaning why do I have to say bye? I can do it short also. And look at the leverage, here you are getting leverage up to 50-50 times. So this is your initial leverage. And this is how options work. You have the entire option chain. You can trade in Bitcoin, Ethereum, Solana etc. here. You are getting these benefits. So I hope you have clearly understood the legality and taxation of crypto in this video. If you still have any questions, feel free to ask in the comment section. If you are going to open an account on Coin DCX, then I will tell you one more thing. I am providing a link to a Google Form. Please fill it up. So that our team can make you a part of our private Telegram community. You can get added to it and participate in our giveaways. You have to tell me in the comments when did Bitcoin start? You have to tell me in the comments in which year Bitcoin was born and from that date till now, how much percentage return Bitcoin has already given to its investors. If you do n't know, search it on Google and tell me. So that your general knowledge increases. Finally like this video. If you want to learn trading in cryptocurrencies, then we have a playlist already created which you can find on the end screen and on the i button. Go check out that playlist as well, So That You Can Learn Trading. See you in the next video. Till then subscribe to this channel. Click on the bell icon. You are self- made and Jai