Indian Tribunal Classifies Pre-2022 Crypto Gains Favorably

The Income Tax Appellate Tribunal (ITAT) in Jodhpur, India, has ruled that profits from cryptocurrency transactions conducted before April 1, 2022, should be classified as capital gains, rather than income from other sources. This landmark ruling clarifies that cryptocurrencies like Bitcoin and Ethereum were considered capital assets prior to the introduction of the Virtual Digital Assets (VDA) regime in 2022, which imposes a flat 30% tax rate on crypto gains. The ITAT's decision offers a more favorable tax treatment for early adopters, allowing them to benefit from lower capital gains tax rates applicable before 2022. The case prompting this decision involved an individual who profited significantly from Bitcoin sales and argued for taxation under long-term capital gains, which the ITAT upheld. This ruling provides much-needed clarity for investors and sets a precedent for fair treatment of crypto gains during the pre-VDA period.