No Loss Offset Rule India: What It Means for Crypto Investors
When you trade crypto in India, the no loss offset rule, a tax regulation that prevents investors from using cryptocurrency losses to reduce taxable gains. Also known as the crypto loss disallowance rule, it means if you lose money on one trade, you can’t use that loss to lower your tax bill from another trade that made a profit. This isn’t just a technicality—it changes how you plan every buy, sell, or swap.
The rule applies under India’s 2022 crypto tax framework, where all digital asset gains are taxed at 30%, with no deductions allowed for expenses, fees, or losses. That’s different from stocks or real estate, where you can carry forward losses to offset future gains. With crypto, a $10,000 loss on Solana doesn’t help you dodge tax on a $5,000 profit from Bitcoin. You pay 30% on the profit, full stop. And if you’re thinking about selling at a loss to reset your position, that won’t reduce your tax burden either. The capital gains tax India, the flat 30% rate applied to all crypto profits regardless of holding period doesn’t care about your overall portfolio performance—it only looks at each gain individually.
This rule hits hard because crypto prices swing wildly. You might lose money on a dozen tokens and make a few big wins—but under Indian law, you still owe tax on every single profit. There’s no carryforward. No netting. No deductions for transaction fees, gas costs, or wallet transfers. Even if you’re net negative for the year, you still pay tax on your wins. The Indian crypto regulations, the strict, non-negotiable tax framework enforced by the Income Tax Department since April 2022 leave no room for interpretation. And while other countries let you offset losses, India treats crypto like a lottery ticket: you pay tax on every win, no matter how many losses you had.
So what can you do? Track every transaction. Know your cost basis. Don’t assume losses help. And don’t rely on tax software that assumes loss offsetting is allowed—most global tools don’t support India’s unique rule. You’ll need to manually calculate gains and losses separately. If you’re active in DeFi, NFTs, or airdrops, this gets even more complex. The posts below break down real cases: how traders got hit with unexpected bills, why claiming losses doesn’t work, and what the tax department actually looks for during audits. You’ll also find guides on how to report correctly, avoid penalties, and plan trades with this rule in mind. This isn’t about avoiding taxes—it’s about understanding them so you don’t get blindsided.
