Filing your crypto taxes? Let’s make this simple

MUMBAI: Rajagopal Menon is vice president at WazirX, one of India’s leading cryptocurrency exchanges, where he drives innovation and growth across the platform. He previously served as assistant vice president at Reliance Jio, where he led the launch of Jio.com and supported the rollout of the company’s 4G services, and as chief operating officer at StepOut.com, an online dating platform later acquired by Tinder. He began his career at gaming company Games2Win. A recognised voice on crypto and digital assets, Menon’s commentary has appeared in the Economic Times, Hindustan Times, Hindu Business Line, Times of India and Financial Express. In this piece, he walks readers through India’s tax regime for virtual digital assets, offering a simple four-step process for filing crypto tax returns and flagging the most common mistakes investors make, from missed TDS credit claims to incomplete reporting across exchanges.

Tax month’s here, and if you’ve been filing returns for the previous financial year, here’s the truth: the discipline you bring to your trades needs to show up in your tax filing too. A few focused hours today can save you from notices, mismatches, and headaches down the line. Worth doing right.

Quick recap of where things stand

Since the Union Budget 2022, India has had a dedicated tax regime for Virtual Digital Assets. Here’s what that means in practice: a flat 30% tax on gains from transfer of VDAs, plus 1% TDS on every transaction, plus applicable surcharge and cess. The Income Tax Act taxes income from the transfer of VDAs which covers spot trading. VDA losses cannot be set off against other income or carried forward. Futures and derivative products are a bit more nuanced, and the treatment can vary depending on legal structure, so when in doubt, check with a tax professional.

Four steps. That’s it.

• Pull your full transaction history: every exchange, every wallet, the whole financial year.
• Reconcile with your TDS records, Form 26AS, and AIS: make sure every eligible transaction is accounted for.
• Calculate your gains and prepare your report in the right format before you file.
• Review carefully, or bring in a professional if your trades span multiple platforms or wallets and things get complex.

We built something to help: Taxlyst

This is exactly why we are building Taxlyst, a free crypto tax reporting tool. Users can import their transactions from multiple exchanges, calculate your gains, losses, identify claims, and walk away with a tax-ready report. Whether you trade on WazirX or elsewhere, the goal is the same: less manual effort, fewer errors, and a filing process that doesn’t take up your entire weekend.

TaxLyst provides tax-reporting assistance and does not constitute tax or legal advice. Tax treatment may vary based on individual circumstances. Please consult a qualified tax professional where required.

Three mistakes we see far too often

1. Not claiming your TDS credit: A lot of investors think the 1% TDS is extra tax. It’s tax deducted at source, and you can claim it as credit against your overall liability. Skip this, and you’re either overpaying or missing a refund you’re owed.
2. Reporting only the gains: Only declaring profitable trades, or only looking at one exchange is a mistake we see constantly. Your filing needs to reflect everything – every exchange, every wallet, every taxable transaction. Leave gaps, and you risk a mismatch with what the tax department already has on record.
3. Scrambling at the last minute: Waiting until deadline day to manually calculate gains across multiple platforms is a recipe for errors. You’re bound to incur wrong cost basis, missed transactions, overlooked TDS credit. Keep records through the year, or use a proper tax tool. It’s the difference between a stressful weekend and a five-minute filing.

Pro tip: Before you hit submit, cross-check your crypto transactions against Form 26AS and your AIS. Make sure your numbers and the department’s numbers tell the same story.

Do this right, and tax season stops being something you dread.