Definition
No Set-Off Rule (Crypto)
Under India's VDA tax rules, a loss from one crypto asset cannot be offset against gains from another or against any other income, nor carried forward. This is informational, not advice.
The no set-off rule means each VDA transaction's gain is taxed at 30% on its own, while losses are effectively ignored for tax purposes. A loss on one coin cannot reduce the taxable gain on another coin, on stocks, on salary, or on any income.
Nor can such losses be carried forward to offset future gains. This makes crypto taxation far harsher than equity or other capital assets, where set-off and carry-forward of capital losses are generally permitted.
The practical effect is that a trader can pay tax on gains even in a year of net losses. This entry is informational only, not investment advice; crypto is high-risk and volatile.
Related terms
- Virtual Digital Asset (VDA)Virtual Digital Asset is the term Indian tax law uses for cryptocurrencies, NFTs and similar tokens, bringing them under a specific, stringent tax regime. This is informational, not investment advice.
- 30% Crypto Tax (India)India taxes income from transferring virtual digital assets at a flat 30% rate, with no deductions other than cost of acquisition and no set-off of losses. This is informational, not advice.
- 1% TDS on CryptoIndia levies a 1% tax deducted at source on the transfer of virtual digital assets above specified thresholds, creating an audit trail of crypto transactions. This is informational, not advice.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.