new delhi in a setback for crypto enthusiasts and trading platforms the government on monday clarified that losses incurred from one kind of virtual digital assets vdas cannot be set off against the gains from any transaction involving another vda while computing tax this implies that investors will have to pay a 30 percent tax for every gain they make and losses are not deductible from the final taxation amount if different tokens are tradedwhat does this tax clarification implyso when you earn profit on one token but lose on the other you are still obligated to pay tax of 30 on the profited token these steps can hinder the growth of the crypto ecosystem which is currently witnessing a huge spike in the country said edul patel ceo and founder mudrex it means that losses booked in one class of asset like bitcoin cannot be set off against income from other class of asset like etherium investors will have to treat each virtual digital asset separately for the purpose of taxation this is discouraging for the crypto industry and for the investors as well maneet pal singh partner ip pasricha cofor example an investor has earned rs 100000 from sale of one class of asset like bitcoin involving and simultaneously incurred losses worth rs 50000 from another class of assetetherium in that case the investor will have to pay a 30 percent tax on the rs 100000 profit from bitcoin and loss of rs 50000 from etherium will not be allowed to be set off in a scenario where losses of one class would have been allowed to set off against gains from another class the investor would have had to pay tax only on the net gain of rs 50 000every vda is considered to be a separate asset which will have its profit or loss booked independently this could have been done to prevent unaccounted vda swaps once cbdcs are implemented the same is expected to ease out since onchain records of profitloss will be available for taxation purpose noted amit nayak cofounder and ceo of sahicoinwhile india awaits a cryptospecific legislation the government seems to be further affirming its stance in relation to levy of tax on cryptocurrency the government move might be taxing for the crypto community since the tax implications on trading in crypto continues to be stringent while its regulatory framework remains unclear said rishi anand partner dsk legalthe move will discourage investors as it increases risk talent will move outside indiataxes imposed by the indian government are quite harsh for the virtual digital assets industry not being able to offset the losses of one virtual digital asset with another will discourage a lot of investors as it increases their risk and decreases the end reward this would disincentivize them from trading with indian exchanges and deal only with foreign exchanges or decentralized exchanges the proposed tax framework on digital assets would lead to a decline of the blockchain industry in