Sale of Virtual Digital Asset (VDA including Cryptocurrency) should not be considered as a capital gain starting from FY 2022-23 (AY 2023-24) but should be treated as income. Tax on such could be arrived from Crypto Tax Calculator
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Any capital asset held by a person for a period of more than 36 months immediately preceding the date of its transfer will be treated as long-term capital asset.
However, in respect of certain assets like shares (equity or preference) which are listed in a recognised stock exchange in India, units of equity oriented mutual funds, listed securities like debentures and Government securities, Units of UTI and Zero Coupon Bonds, the period of holding to be considered is 12 months instead of 36 months.
In case of unlisted shares in a company, the period of holding to be considered is 24 months instead of 36 months.
In case of unlisted shares of a company or an immovable property being land or building or both. The period of holding to be considered is 24 months instead of 36 months.
Capital gain broadly calculated as Capital gain = ( full value of consideration received on transfer) - ( cost of acquisition of capital asset + cost of improvement of capital asset + expenditure incurred in connection with transfer of capital asset).
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Gain arising on transfer of long-term capital asset is termed as long-term capital gain and gain arising on transfer of short-term capital asset is termed as short-term capital gain. However, there are a few exceptions to this rule, like gain on depreciable asset is always taxed as short-term capital gain.
The benefit of indexation is available only in case of long-term capital assets and is not available in case of short-term capital assets.
Any Virtual Digital Asset (including Cryptocurrency) is generally considered as a capital asset until 2022 in India. During Budget 2022, it was announced that the cryptocurrency is considered as a 'special asset' where the tax rate applicable would be 30%without indexation, without expenses, without set-off against any income within the year, and without carryforward losses to future years.
Refer @ Crypto / VDA Income Tax Preparation Guide to Know more
