Summary: India’s Income Tax Appellate Tribunal (ITAT) just dropped a bombshell ruling, clarifying how crypto gains will be taxed especially for transactions that happened before April 2022.
Capital Gains, Not Extra Income
The ITAT has officially labeled cryptocurrencies like Bitcoin and Ethereum as capital assets. Translation? Profits made from selling crypto before April 2022 will be taxed as capital gains, not as income from other sources.
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For long-term HODLers who’ve held their crypto for over three years, profits will fall under long-term capital gains (LTCG), meaning a lower tax burden. For instance, if you bought Bitcoin for Rs 5.05 lakh in 2015 and sold it for Rs 6.69 crore in 2020 yep, that massive profit is LTCG and taxed at favorable rates.
Post-April 2022 – The Game Changed
Here’s where it gets spicy: after April 2022, profits from crypto are taxed at a brutal flat 30% rate, regardless of how long you’ve held. So, those big gains? Uncle Sam (or, in this case, India’s taxman) will take his cut.
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This ruling gives much-needed clarity to Indian crypto investors navigating the tax maze. Pro tip: Keep those transaction records spotless tax season just got real.