Things to keep in mind while choosing a crypto tax calculation software

moneycontrol.com:

In India, where cryptocurrency is still at an evolving stage, crypto tax calculation is not something that comes easy.

While many software programs are being released to make crypto tax calculations simple, there are things that investors need to keep in mind while using them.

Starting July 1, buyers of digital assets in India are required to pay a 1 percent tax on the amount payable to sellers. This is in addition to a flat 30 percent income tax on earnings from cryptocurrencies that started on April 1.

The government’s decision to tax cryptocurrency transactions divided investors into two.

Nonetheless, if you are a crypto investor, you have to follow the current taxation norms. To make things easier, tax calculation tools like TaxCryp, Clear, KoinX, etc., have emerged.

Moneycontrol spoke to several experts in this domain to understand what points investors should keep in mind while using crypto tax calculation platforms.

How do crypto tax calculation tools work?

Most of them are designed to provide solutions to both exchanges and investors. These tools help investors understand the tax liability, and they are backed by an experienced team of chartered accountants and tax specialists.

Computing the tax liability manually can be a tedious task as crypto has an associated cost basis attached to it, given the multiple fluctuations in value, moving cost basis, mark-to-market value, and multiple types of transactions. Every single incidence/ activity needs to be tracked and computed for taxation.

The emerging tools will help you understand the entire process in a couple of simple steps. Investors just need to attach their crypto wallets to the system. Besides offering full-scale tax compliance, which includes understanding how they