Quote from: webtricks on March 24, 2022, 10:15:01 PM

Quote from: squaretriangle on March 24, 2022, 09:42:58 PM

Quote from: teosanru on March 24, 2022, 06:50:49 PM

This line makes it quite clear that no set off will be allowed against any gain that you have made in cryptos.

Thank you but webtricks wrote:

Quote

The clause (a) made it very clear that nothing is allowed to be deducted against the profit earned from crypto trade except cost of acquisition i.e. the buy price. However, clause (b) contradicts the above clause. It states that any loss from the crypto trade cannot be set-off against any income under any other provision of the act. The term 'other' here signifies that loss cannot be set-off against any income other than the crypto income which means that the loss from the one trade can be set-off from the profit made on the other crypto trade.

My take: Investors will be allowed to set-off losses from the profits and they will only have to pay tax on the net profits earned during the year. The clause (a) has a typo and most probably will be rectified and the term 'other' will be included in the first clause as well when the act will be enacted in March 2022.

Like I said earlier, there was a typo in the bill and government corrected the same in the final draft of the bill but guess what, the correction is entirely opposite to what I was expecting. Instead of including the term 'other' in the first clause, government has removed it from the clause (b) as well. Here's the copy of the final bill amendments:

So, the bottom line is we can no longer set-off losses from the profits. Government will only consider absolute profits for the tax purposes which is highly inappropriate and as a member of Indian Crypto Community, I will try to oppose it. But as of now, this is the legal position from the government.

To an extent, it clearly indicates that the government is discouraging cryptocurrency trading. If you incur loss you still need to pay 30% tax because you invested the amount in crypto. This will encourage illegal trading and will come as a shock to the government as they will be helpless in stoping such activities.