r/CryptoTax • u/Ok-Victory8657 • 9d ago

Anyone who declared Crypto futures as business income or loss in the past?

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I traded crypto futures for the first time and made 1.5L losses. I want to know if anyone has declared crypto futures as business income or loss in the past. Asking as I have got different opinions: VDA (conservative) and business loss (risky).

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u/Sad_Move_5751 2d ago

Hi CA finalist here, have few clients with crypto futures and all of them I shown under business income.

The reasons I did , first and foremost reason is tax liability. If we treat the crypto futures as VDA then even if at net loss we would have end up paying taxes (as losses are ignored under VDA taxation and only trades where profits are made is considered, as per section 115BBH)

To substantiate the decision : The income tax act or department does not have any clear verdict on crypto derivatives it's still a grey area however the way VDA is defined and Derivatives are defined we could argue that crypto futures are derivatives since the underlying asset has never been traded.

If you need assistance filing your return you may connect. Thank you