TAX CALCULATIONS

HOW TAXES ARE CALCULATED

• Internal Link to Local Tax Guide

India - https://www.koinx.com/crypto-tax-guides/india 

Australia - https://www.koinx.com/tax-guides/crypto-tax-australia-guide 

UK - https://www.koinx.com/tax-guides/crypto-tax-uk-guide 

• How does the platform handle tax calculations for complex trade types like futures and options?
  

For complex trade types like futures and options in cryptocurrency, KoinX calculates taxes based on Realised Profit and Loss (PnL). The platform converts the realised PnL from these transactions into INR (Indian Rupees) terms. 

This approach enables the accurate calculation of taxable gains or losses from these sophisticated trading activities, ensuring compliance with tax regulations. By focusing on Realised PnL, KoinX effectively manages the intricacies associated with the taxation of futures and options in the crypto domain.

• How does KoinX support the taxation of NFT transactions?
  

KoinX tracks and records all NFT transactions, including purchases, sales, and transfers. It integrates with NFT marketplaces to gather transaction data, ensuring accurate representation in tax reports. The platform categorises NFT transactions for tax purposes, distinguishing between capital gains, income, or other relevant tax categories based on the user's jurisdiction and applicable laws.

• How are NFT sales and purchases reflected in my tax report?
  

NFT transactions are detailed in the tax report with information on purchase and sale dates, prices, and any associated gains or losses. These transactions are incorporated into the overall capital gains calculations, showing their impact on the user’s taxable income.

• What are the different methodologies by which tax reports are generated?
  

KoinX offers various accounting methodologies like FIFO (First-In, First-Out), LIFO (Last-In, First-Out), Average Cost, and HIFO (Highest-In, First-Out) to calculate gains and losses. Users can select their preferred method based on their tax strategy and legal requirements, impacting how transactions are reported and taxes calculated.

FIFO (First-In, First-Out): This method assumes that the first assets purchased are the first ones sold, prioritising older assets for tax calculations.

LIFO (Last-In, First-Out): Contrary to FIFO, LIFO considers the most recently purchased assets as the first ones sold, focusing on newer assets in tax calculations.

Average Cost: This method calculates gains or losses using the average cost of all assets of the same type, providing a more balanced approach over individual transaction prices.

HIFO (Highest-In, First-Out): HIFO prioritises the sale of assets with the highest purchase cost first, potentially minimising capital gains and thus reducing tax liability.

• What is tax loss harvesting?
  

Tax loss harvesting involves selling assets at a loss to offset capital gains, thereby reducing the overall tax liability. KoinX helps identify opportunities for tax loss harvesting by analysing transaction history and unrealized gains or losses, enabling users to make informed decisions to optimise their tax outcomes.

TAX SUMMARY SECTION

• How can I switch between different financial years on KoinX?
  

In the Tax Reports section, click on the FY 20XX-20XX calendar button and then you can select a particular financial year for generating the tax report. 

• How do I access the full tax report?
  

You can access the full tax report after selecting a plan that suits the number of transactions you have.

• Where is the option to enter promo codes?
  

While paying for a plan, you will find the option to apply a promo code in the bottom left price breakup section.

• What methods can I use to pay for a KoinX plan?
  

You can pay for your plan via UPI, net banking, and Debit/Credit Cards.

• How do I request a custom package tailored to my needs?
  

You can contact the customer support team for assistance regarding custom packages.

• Is there an option to input my GST details?
  

While paying for your plan, you can find the checkbox to add your GST details in the bottom-left corner of the page.

• Where can I locate details related to TDS?
  

In the Tax Reports section, scroll down the page to see all the details related to TDS.

• What subscription plans are available for me to choose from?
  

You can find the updated prices and offers here: https://www.koinx.com/in/pricing. 

FILE ITR SECTION

• Why can't I choose the Assisted Filing option?

The Assisted Filing Option is by default locked. You have to be a KoinX paid customer to access the Assisted Filing option.

• Is assisted filing included in any of the KoinX plans, or does it need to be purchased separately by the user?
  

Assisted Filing is not included in any of the KoinX plans, it needs to be purchased separately after purchasing a KoinX plan.

• How does providing GST details benefit the user, and how will these details be used for the purchased plan?
  

When users provide their GST (Goods and Services Tax) details on KoinX, it enables them to claim Input Tax Credit (ITC) while filing their GST returns. This can be particularly beneficial for businesses and professionals, as it allows for a deduction of the tax paid on inputs from the taxes to be paid on output. It effectively reduces the overall tax burden. 

The GST details are linked to the user's account and applied to transactions on the platform, ensuring that the tax component of any plan purchased is appropriately documented for tax purposes. For specific guidance on leveraging this for tax filing, users are advised to consult with their Chartered Accountant.

• Does KoinX allow users to generate tax reports for financial years before the current one, and if so, how far back can these reports be generated?
  

Yes, KoinX offers to generate tax reports for previous financial years. The reports can be generated for up to the past 6 FYs.

• What steps does a user need to take to generate a tax report for a previous financial year, and are there any additional charges for this service?
  

In the Tax Reports section, click on the FY 20XX-20XX calendar button and then you can select a particular financial year for generating the tax report. There are no additional charges for this service; it’s completely free.

TROUBLESHOOTING TAX CALCULATION ISSUES

• Why does the tax amount appear to be significantly lower or higher than expected?
  

The tax amount can vary greatly due to fluctuations in cryptocurrency values. In cases of manual integration, updating the CSV file with the most current values ensures accurate tax calculations.

• What are the necessary warnings or reviews that should be considered in this context?
  

Key factors include accurate data entry for the cost of acquisition and selling price of the coins, as these directly influence tax calculations.

• How does the cost of acquisition and coins influence the tax value?
  

The tax value is dependent on the cost of acquisition and the selling price. If users are unaware of these values, it can lead to inaccurate or incomplete tax calculations. Accurate tracking and documentation of purchase and selling prices are crucial for precise tax assessment.