Cryptocurrency losses can be used to reduce cryptocurrency taxes. Like other capital losses, virtual currency losses are also tax deductible. This means that you can use your crypto losses to offset some of your capital gains taxes by reporting such losses on your tax return.
You can claim up to $3,000 in capital losses per year. Losses over $3,000 can be carried forward to future tax returns and deducted from future capital gains taxes. Additionally, charitable donations using cryptocurrencies can also help reduce taxes.
In Bharat, as per the latest updates in 2024, losses incurred from one virtual digital currency cannot be set-off against income from another digital currency.
Furthermore, losses from digital assets cannot be set-off against any other income. This means that a crypto investor cannot offset previous year losses from a crypto asset while filing Income Tax Return (ITR) for the current year.