India’s crypto tax structure may seem rigid, especially for spot trades. But there’s one way to stay ahead: offset your crypto losses through futures trading.
Unlike spot trades that offer no tax relief, crypto futures give traders flexibility to set off and carry forward losses, helping them reduce tax burdens legally and efficiently.
Why You Can’t Offset Your Crypto Losses from Spot Trades
Spot trading of crypto (like Bitcoin or Ethereum) is taxed under harsh conditions in India. Unfortunately, you can’t offset your crypto losses from spot trades under the current law.
Spot Tax Highlights:
- 💸 30% flat tax on profits
- ➕ 4% cess
- 🔻 1% TDS if total annual transfers > ₹50,000
- ❌ No way to offset your crypto losses from spot trades
- 🛑 No carry-forward of losses
- 🧾 No deductions except cost of purchase
If you lose money in spot trades, the tax system offers no cushion. You simply cannot offset your crypto losses here, regardless of how much you lose or how frequently you trade.
Offset Your Crypto Losses with Crypto Futures in India
Here’s where it gets better. Crypto futures trades are treated as business income — which means you can offset your crypto losses, just like in other business setups.
This tax treatment is a significant advantage for Indian crypto traders who want more control over their profits and losses.
Key Benefits:
- 🔁 Profits taxed as per your income tax slab, not a flat 30%
- 📉 You can offset your crypto losses from futures against business income
- 🔂 Carry forward these losses for 4 years
- 💡 Deduct expenses like internet, electricity, and platform fees
This gives you real power to reduce your tax liability — provided you file returns on time. You also benefit from a structure that is more suited for active traders and businesses.
Offset Your Crypto Losses: A Practical Example
Let’s say you’re a trader in FY 2024–25 and you incur:
- ₹200,000 loss in spot trades
- ₹300,000 loss in crypto futures
What Happens?
- The ₹200,000 spot loss? Can’t be set off. You lose tax advantage.
- The ₹300,000 futures loss? It qualifies as a business loss.
- ✅ Can be used to offset your crypto losses against any crypto futures profit
- ✅ Can be carried forward for 4 years
Example Outcome:
In FY 2025–26, you earn ₹500,000 profit in futures. You can use the ₹300,000 loss from last year to reduce your tax liability—paying tax only on ₹200,000.
This way, you’re able to smartly manage your losses and preserve more of your trading profits.
Offset Your Crypto Losses: Comparison Snapshot
| Feature | Spot Crypto | Crypto Futures (Business Income) |
|---|---|---|
| Offset Your Crypto Losses? | ❌ Not Allowed | ✅ Yes, within business income |
| Carry Forward of Losses | ❌ Not Allowed | ✅ Up to 4 years (file returns on time) |
| Expense Deductions | ❌ Not Allowed | ✅ Yes (fees, electricity, etc.) |
Final Thoughts: Why Offset Your Crypto Losses with Pi42 Futures
For Indian traders, the choice is clear. While spot trading offers no tax wiggle room, futures trading offers better tax flexibility, helps save tax, and reduces future liabilities.
With Pi42, India’s trusted INR-based futures exchange:
- ✅ No 30% VDA tax
- ✅ No 1% TDS
- ✅ INR margins
- ✅ Legal option to offset your crypto losses
Take advantage of futures trading to stay compliant and tax smart. Your losses today can help you save taxes tomorrow—but only if you’re using the right tools and platforms.
“The ability to offset your crypto losses is especially useful for full-time or high-frequency traders in India. Unlike traditional markets, crypto futures on Pi42 offer tax advantages tailored for Indian regulations, making it easier to stay compliant while building wealth over time.”
Disclaimer
This blog is for informational purposes only. Always consult a qualified tax advisor or CA before filing your returns or making investment decisions.