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The crypto market on Tuesday traded on a bullish note as heavyweight Bitcoin outperformed and crossed over $32,000-mark. The world's largest cryptocurrency is rebounding after nine straight weekly losses and has even made its biggest gains since March. The bulls led to ignite buying in other counterparts as well. With Bitcoin swinging upward, investors probably looking to book profits, and hence understanding taxes on the cryptocurrency is essential to reap notable gains.

As per CoinMarketCap, Bitcoin is currently trading at $32,104.35 up by 4.84%. The coin has jumped to an intraday high of $32,145.18.

At the current market price, Bitcoin's market cap stood at $611.74 billion. However, its fully diluted market cap was more than $674 billion.

As per the Coin Desk data, Bitcoins' transaction value was over $71.4 billion in the last 24 hours, while its transaction count stood at 267,947. Over here, Bitcoin has touched the day's high of $32,201.04 before correcting.

Bitcoin's weekly gains were more than 8%.

Counterpart Ether which is the second-largest cryptocurrency - surged by nearly 4% and traded at around $1,985. While Tether which is the third most valued coin, traded flat near $0.9993.

In percentage terms, Waves gained the most nearly 45% followed by Axie Infinity advancing nearly 22%, Cardano jumping nearly 19%, KAVA soaring over 14% and Near Protocol climbing over 10%.

Overall, the global crypto market cap is presently traded at $1.32 trillion rising by 3.91% over the last day. Its total crypto market volume jumped by 34.13% to $94.66 billion over the last day. The total volume in DeFi is currently $8.38B, 8.85% of the total crypto market 24-hour volume. The volume of all stable coins is now $81.24B, which is 85.82% of the total crypto market's 24-hour volume.

In India, there is a tax rate of 30% on crypto incomes. During Budget 2022, Finance Minister Nirmala Sitharaman launched income tax rules for taxing income from virtual digital assets including cryptocurrency, NFTs, metaverse, and other digital currencies. Also, there are no deductions available on expenses incurred towards earning from Bitcoins. Further, losses incurred from one crypto asset cannot be set off by incomes from other crypto assets.

To calculate bitcoin income, the transfer value of bitcoin is deducted from the cost of acquisitions.

Here's an example of how Bitcoin tax calculations work as per the ClearTax report.

Suppose you have purchased two bitcoins at 2 lakh, each of 1 lakh. If you decide to sell one bitcoin at 30,000, i.e. at a loss of 70,000, i.e. when the bitcoin price goes down. In the same year, the price of the other bitcoin held rises, and you sell it at 150,000, so there will be earnings or profit of 50,000. So for calculating the income tax liability, there will be zero tax on the loss of 70,000 incurred by the sale of the former bitcoin. And for the profit earned of 50,000 on selling the latter bitcoin, it will show the tax liability of 15,000 (30% tax rate).

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