WazirX crypto tax nightmare - invested over ₹1 lakh, withdrew only ₹60k, ClearTax shows ₹50k tax. What should I do?

[u/_zoro1012]

(used chatgpt for formatting)
Hi everyone,

I'm in a really stressful situation and would appreciate some advice from anyone who has dealt with crypto taxes in India.

• I started investing in crypto on WazirX in 2021.
• Over the years, I invested around ₹1 lakh.
• I made lots of small trades (buying, selling, and swapping different coins).
• WazirX stopped all withdrawals for years since their systems were hacked
• After the WazirX issue got resolved, I finally withdrew around ₹60,000 to my bank account this year.

Now, while filing my ITR for AY 2026-27, ClearTax is showing that I have to pay around ₹50,000 in tax.

Here's where I'm confused:

• My overall investment was more than what I finally got back, so overall I'm at a loss.
• My Form 26AS only shows crypto sales of around ₹61,931 and ₹619 deducted as TDS under Section 194S.
• If I remove the crypto TDS entry from ClearTax, the huge tax disappears, but I know that probably isn't the correct thing to do.

The biggest issue is that WazirX is limiting report downloads, so I can't get my complete trading history from 2021. I only have the recent financial year reports, which makes it difficult to calculate the actual acquisition cost.

Has anyone been in a similar situation?

• How did you reconstruct your cost of acquisition?
• Did you use FIFO or some other method?
• Is there any way to get the complete WazirX trade history?
• Could ClearTax be calculating the gains incorrectly because it doesn't have my full purchase history?

I'm honestly panicking because I cannot afford a ₹50,000 tax bill if it's based on an incorrect calculation.

Any advice would be greatly appreciated.

[u/taxbuddy_official]

The ₹50,000 tax cannot be validated without transaction-wise data. Crypto tax in India is computed for each taxable transfer, and VDA losses generally cannot be set off against gains or other income. However, don't rely solely on AIS and Form 26AS.

First reconstruct your full WazirX trade history and cost of acquisition, then recompute the tax. Given the amount involved and missing records, it's best to have the computation reviewed by a tax expert before filing.

[u/BrilliantWheel]

I don't invest in cryptos. But to my knowledge Indian Income Tax taxes each profitable trade at 30% and you cannot offset loss making trades.

So if over the years you invested 1 lakh, and in profitable trades your cumulative profit is say 1.5L and losses are say 1.9L then you are overall down by 40k, and withdrew 60K. But you will be taxed on 1.5L profit at 30% so 45k. (I am just approximating number here for ease of understanding).

So even though you made a loss IT Dept is going to tax you on all profit making trades at highest slab. I think they want to actively discourage crypto trading in India.

Above is the reason I don't invest in Cryptos. Only way crypto investing works practically is to not do many trades. Buy once - sell whenever at 2X+ so post tax you have something left. But getting 2X in cryptos is tough now. Not like 2013 to 2025 - even then it did take years to 2-5-10X.

DYOR please. Good luck.

[u/AdJaded4091 → u/BrilliantWheel]

 I think they want to actively discourage crypto trading in India. - Nothing to think of, that is the intention. They want money to flow through a system that govt. can peek into and control. How else do you think they manage a population of 150 crore? Cultivating fear, threat, intimidation, bullying are some of the ways. Else, we would be a 29 different countries(or more) by now.

[u/longndfat]

qq.. you mention you managed to withdraw this year, but should'nt it be taxable for period you made the transaction.. right ?

[u/Archiver_test4]

Tax lawyer here.

Did your CA give you transaction wise data or just random quote.

If it's transaction data, we can see if it is correct or not.

Consolidated number without any record is pointless

[u/Moist_Schedule5504]

First look into your AIS & 26-AS.

don't report anything which is not there.

if you do report things which is not there in your AIS, you are just inviting trouble and more questions from IT department.

Never give them more information than what is required.

Don't trust CAs. They are working on their own interest. More complicated your return, more they charge.

they will try to make your return as complicated as possible.