Navigating India’s crypto taxation: Top questions answered

2 min readJun 6, 2023

As the popularity of crypto assets continues to surge in India, understanding the tax implications associated with crypto investments has become crucial for investors. To provide clarity and guidance in this complex landscape, experts from TaxNodes address the top five queries commonly raised by crypto investors.

What happens if I don’t declare my VDAs in my tax returns?

Not disclosing VDA transactions (including cryptocurrencies and NFTs) might be considered underreporting/misreporting of income. As per Section 270(A), severe penalties may be imposed. The penalty amount can vary from 50% to 200% of tax payable on misreporting of income.

How to file for a refund for TDS?

If your TDS refund exceeds the tax payable for the financial year, you can claim back your TDS amount. You can generally find out the refund amount while filing your ITR.

Do I also need to declare my previous year’s gains?

It is essential to declare all your gains as the Income Tax Act provides a mechanism for reassessing the previous years’ filings. The Income Tax Department can serve notice to the taxpayer under which the department can reassess the income of the past 8 years, subject to conditions.

I’ve done P2P transactions; Do I need to file TDS on it?

Depending on the exchange you used, the responsibility of filing TDS for P2P transactions may be on you. Some Indian exchanges do file TDS on your behalf.

Why do I need a tax tool? Can’t my CA do it for me?

The tax computation is quite complex as you need to understand the past purchase value of your VDAs. If the number of transactions is more than 20–30 a year, then CAs might need tools like TaxNodes to calculate your liability. So, it’s advisable to compute your liability yourself using TaxNodes-like tools for accuracy and to avoid penalties.

Simplify your crypto tax reporting, ensure compliance, and ease the stress of ITR filing. Sign up on TaxNodes today via this link.