Crypto F&O Tax Rules in India Unclear
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Cryptocurrency F&O trades in India are treated as derivative contracts, not virtual digital assets (VDAs), so the flat 30% tax and 1% TDS do not apply, according to tax experts.
- Chandni Anandan states that crypto F&O gains are generally considered non-speculative business income, allowing losses to offset other business and capital gains but not salary income.
- Prateek Gupta highlights that settlement method—cash vs. crypto like USDT—critically influences tax classification, with crypto-settled contracts potentially falling under VDA rules.
- Taxpayers must file ITR-3 for crypto F&O income, maintain detailed trade records, and may face tax audits depending on turnover, due to lack of formal guidance.
Why it matters: Traders face uncertainty in tax liability and compliance costs, as a misclassification could trigger higher taxes or penalties; the absence of clear rules increases reliance on costly professional advice and risks inconsistent assessments.
Ask SkimNews
