Crypto arbitrage India tax by Arbique.com | |
How India’s Tax Rules Affect Crypto Traders Introduction India’s cryptocurrency market has seen exponential growth over the last few years. Millions of traders and investors are exploring digital assets, but the government’s 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 doesn’t just impact profits—it determines whether trading strategies like arbitrage, high-frequency trading, or AI-powered automation (such as Arbique) can remain viable. In this blog, we’ll explore India’s 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 cryptocurrencies—legally 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 acquisition).Tax 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. This adds regulatory overhead for both platforms and traders. | |
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Target Prov.: Newfoundland and Labrador Target City : South West Delhi Last Update : Sep 25, 2025 5:45 AM Number of Views: 41 | Item Owner : Arbique.com Contact Email: Contact Phone: 98913 61212 |
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