New Delhi, June 7 -- As investors seek higher returns and diversify their portfolios, cryptocurrencies have emerged as a popular investment option, offering decentralised and border-less transactions. While digital asset can be legally traded, bought and sold in India, they are not recognised as legal tender.

Despite this distinction, investors who earn gains from cryptocurrency transactions are required to comply with the applicable tax and reporting rules. This means the profits are taxed at a prescribed rate and a tax resident must also report these gains while filing their income tax return (ITR).

Any income from the transfer of virtual digital assets such as cryptocurrencies and NFTs are taxed at a flat rate of 30% (plus 4% cess) i...