For an individual classifying themselves as a trader, they will file the income as a business income. And they can take the advantage of presumptive taxation U/S 44AD.
How do you calculate the individual's turnover?
Is it the sum of profit and loss? Or buy value and sell value? Or something else.
Hey Kaal,
Great question on turnover calculation for crypto trading income, especially when the individual opts for business income and presumptive taxation under Section 44AD.
Turnover = Gross receipts or total sales from the business activity.
For trading in cryptocurrencies, turnover means the total sale value of crypto sold during the year — i.e., the sum of the sale proceeds (not profit or loss).
Buying value or cost of purchase is NOT part of turnover.
Under Income Tax laws, turnover is the gross inflow or revenue generated from business activity.
Profit or loss is derived after subtracting cost (purchase price) from turnover.
If someone buys 10 BTC at ₹30 lakhs each and sells all 10 BTC during the year for ₹40 lakhs each:
Turnover = ₹40 lakhs × 10 = ₹4 crores
Profit = Sale proceeds − Purchase cost = ₹4 crores − ₹3 crores = ₹1 crore
Presumptive income = 8% (6% if digital payments) of turnover (gross receipts).
So, the turnover to apply 44AD is the total sale value of cryptos sold during the year.
| Concept | Crypto Trading (Business) |
|---|---|
| Turnover | Total sale value of cryptos sold |
| Profit/Loss | Sale value − Purchase cost |
| Presumptive income | 8% of turnover (if opting 44AD) |
CAclubindia
