Crypto taxation and portfolio management: Clear opens up crypto portfolio management

Clear (formerly Cleartax), which is backed by US payments giant Stripe, is launching a tax and crypto wallet management service for businesses and retail users in India, amid confusion around crypto taxation in certain scenarios among investors and crypto exchanges.

Following the budget’s proposal on crypto taxation, including a 30% tax on crypto gains and a 1% withholding tax deduction, questions remain regarding the tax implication of futures and derivatives trading, loss compensation, trading on crypto aggregators, and defining asset class transfer (will it include peer-to-peer, airdrop, etc.), according to experts ET spoke to .

“So from a business point of view there is a lot of clarity expected. Right now even crypto gain on crypto loss seems like a pure tax event and there is no netting against the With the strictest interpretation for active traders, the tax bill itself may be larger than the wallet, so we’re trying to better understand policy makers,” Clear Founder Archit Gupta told ET “This could significantly affect trading volumes on exchanges.”

Gupta said around 50,000 clients of the platform have reported income from crypto assets so far. It predicts that up to 10 million people will use the company’s services over the next six months to a year, including all major crypto exchanges, DeFi (decentralized finance) startups, and retail investors. He has worked on the development of product offerings including software services products for exchanges for the past five months. The startup has allocated $10 million to initially grow its crypto taxation practice, which over time could grow significantly, Gupta said.

Besides Clear, other companies like BearTax offer software services to calculate crypto trading taxes. Another platform, Catax’s Consumer and Professional (for accountants), offers a tax service for individual traders active on national and international stock exchanges.

Clear recently raised $75 million from investors led by Kora Capital and an additional $2-3 million from product leaders Robinhood and Coinbase. In January, the founder shared his plans to launch new products in the Web3 space.

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Gupta said fear and worry were evident among crypto investors and “why isn’t the tax treatment like stocks” was one of the most frequently asked questions along with “what’s going on? it if I trade on international crypto exchanges”.

Incidentally, swaths of crypto holders were expressing their displeasure with the proposed gambling-like tax regime for crypto investors and the hashtag #reducecryptotax was trending on Twitter on Thursday. According to an influencer intelligence company, Qoruz, the hashtag featured a combination of real people and also bot tweets. A petition started by Aditya Singh on demanding “reasonable crypto tax policies” had over 35,000 signatures as of Thursday night.

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Margie D. Carlisle