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Ethereum Tax Calculator

Profit/Loss from the transfer of Ethereum

₹ 5,00,000

The tax you need to pay*

₹ 1,50,000
*Applicable surcharge and 4% cess payable on the amount of tax.

What is Ethereum?

Ethereum is the second most popular cryptocurrency, after Bitcoin. Like all other cryptocurrencies, ethereum also works based on blockchain technology.

A blockchain is a digitally decentralised, shared public ledger where all transactions are verified and recorded. All the network participants hold an identical copy of this ledger, letting them see all past transactions. Also, once entered, the transactions cannot be changed or tampered. To edit the erroneous transaction, you need to add a new transaction to reverse it, and both transactions are then visible.
Ethereum is said to be much more than a medium of exchange or a store of value. The unique thing about Ethereum is that the decentralised Ethereum network makes it possible for the users to create applications and ‘run’ them on the blockchain network, similar to how the software ‘runs’ on a computer. These applications allow users to store and transfer personal data or handle complex financial transactions.

The Ethereum network can also perform computations as part of the mining process. Further, users can perform smart contracts (automatically executed contracts) on the Ethereum blockchain system. Once the contract conditions are executed or met, the Ethereum system self-executes and delivers Ether to the appropriate party.

Under the Ethereum blockchain network, you can hold ‘Ether’ as an investment or store of value or use it as a digital currency in financial transactions.

What is an Ethereum Tax Calculator?

In Budget 2022, the Finance Minister has introduced the provision for taxing cryptocurrency. Taxpayers have to pay tax on profits made from the cryptocurrency transfer. So, an Ethereum tax calculator is a utility tool that calculates the tax liability arising on the transfer of ethereum as per the new income tax provisions introduced by the government.

How to use the ClearTax Ethereum Tax Calculator?

The ClearTax Ethereum Tax Calculator calculates the amount of tax payable on the profits arising on the transfer of Ethereum. To calculate the same:-

  • Enter the sale price of the asset
  • Enter the purchase price of the asset

The ClearTax Ethereum Tax Calculator will show you the amount of tax you are liable to pay on such a transaction.

Important Points to Note

  • You cannot deduct any expenses from the sale price of the ethereum.
  • Only the cost of acquisition is allowed to be deducted.
  • You cannot set off or carry forward any losses arising from the ethereum transactions.
  • Also, you cannot set off any loss arising from one cryptocurrency transaction against the gains realised from another cryptocurrency transaction.
  • Therefore, enter transaction wise details into the ethereum tax calculator and know the tax liability arising from each transaction.
  • Benefits of Using ClearTax Ethereum Tax Calculator

    • You can calculate the tax liability on the profits from Ethereum transactions in just two simple steps.
    • The ClearTax Ethereum Tax Calculator is easy to use, and you can use it from the comfort of your home or anywhere.
  • You also get a real-time picture of your income tax liability when buying and selling Ethereum.
  • Frequently Asked Questions

    How is ETH transfer gain tax calculated?

    Tax on crypto income is to be paid at a 30% flat rate. The taxable amount of ETH transaction gains can be calculated by reducing the cost of acquisition, i.e. the purchase cost, from the consideration amount received. No other deductions are allowed. For example, we cannot take deductions for any transaction cost incurred or charges paid to the crypto exchanges. You can deduct only the cost of acquisition.

    I lost money trading Ethereum. Do I still pay tax?

    If you have incurred loss while transferring crypto assets like ETH instead of profit, you are again in an unfavourable position. You cannot use that loss to set off against any other type of income like from the business income or any salary income or house property income, etc. And such loss is not allowed for carry-forward to be set off against crypto income in future years.

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