In India, cryptocurrencies are classified as virtual digital assets (VDAs) under the Income Tax Act, 1961. For the financial year 2024-2025, these assets are subject to a 30% tax on gains from transfers and a 1% tax deducted at source (TDS) on all transactions. Taxable events include trading, staking rewards, airdrops, and mining income. Conversely, simply holding crypto or transferring assets between personal wallets is not taxable. Income from cryptocurrencies may be classified as business income or capital gains, with applicable tax rates set at a flat 30% for both short-term and long-term gains. Furthermore, a TDS of 1% is applicable on transactions above ₹50,000 in a financial year, with specific rules for non-cash payments and exemptions for certain individuals. Compliance entails accurate record-keeping for all transactions, which is crucial during audits. Important deadlines for filing income tax returns are July 31, 2025, for individuals and October 31, 2025, for businesses. The landscape remains complex, especially concerning cross-border transactions and the lack of tax relief for lost or stolen assets.

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