Business

What Are The Benefits of Using Crypto Tax Software?

Published

2 years ago

January 3, 2023

Swati

Cryptocurrencies have gained significant popularity in recent years, and many people in India are now investing in them. However, investing in cryptocurrencies also means you have to deal with taxes. In India, the government has not yet issued any specific guidelines on how to deal with cryptocurrency taxation, leaving many investors confused and unsure of how to proceed. This is where crypto tax software can come in handy.

Table of Contents

Cryptocurrency Taxation in India:

In India, cryptocurrencies are not yet regulated by the government. However, the Income Tax Department has classified them as “assets,” which means they are subject to taxation. As tax laws, there is crypto tax in India if any profits gained from the sale of cryptocurrencies are subject to capital gains tax. The rate of tax depends on the holding period of the cryptocurrency. If you hold your cryptocurrencies for less than 36 months, the gains are considered short-term capital gains, and you will have to pay tax as per your income tax slab. If you hold them for more than 36 months, the gains are considered long term capital gains, and the tax rate is fixed at 20%.

The Benefits of Using Crypto Tax Software:

Using crypto tax software can make dealing with cryptocurrency taxation a lot easier. Here are some of the benefits of using such software:

Accurate Calculation: Crypto tax software is designed to accurately calculate your capital gains tax liability. It takes into account all the transactions you have made and applies the relevant tax rules.
Time-Saving: Manually calculating your capital gains tax liability can be a time-consuming task, especially if you have made a large number of transactions. Crypto tax software automates the process and saves you time.
Tax Planning: Crypto tax software can help you plan your taxes better. By analysing your transactions and gains, the software can suggest ways to minimise your tax liability legally.

How to Use Crypto Tax Software:

Using crypto tax software is easy. Here are the steps you need to follow:

Choose a crypto tax software that suits your needs : There are many options available in the market, so choose the best crypto tax software that provides accurate calculations, is easy to use, and offers good customer support.
Connect your cryptocurrency exchange account to the software : Most crypto tax software supports major cryptocurrency exchanges like Binance, Coinbase, and Kraken.
Import your transaction history into the software : The software will automatically calculate your capital gains tax liability based on your transaction history.
Review your tax report and file your tax returns : The software will generate a tax report that you can use to file your tax returns.

Conclusion:

In conclusion, cryptocurrency taxation in India can be a complex issue, but using crypto tax software can make it a lot easier. With the help of such software, you can accurately calculate your tax liability, save time, and plan your taxes better. I will suggest you to use Binocs, Binocs is one of the best crypto tax software available which will make your investment experience very smooth. So, if you are an investor in cryptocurrencies in India, consider using Binocs to avoid any tax-related complications.