What is FIFO in crypto taxation?

What Is FIFO in Crypto Taxation?

FIFO (First In, First Out) means that when you sell crypto, the cost basis is taken from the earliest purchase(s) first. For example, if you bought 0.1 BTC in January and 0.1 BTC in March, and then sold 0.1 BTC, you would use the January cost. FIFO can result in higher taxable gain if early purchases were cheaper. Check whether Indian tax law allows other methods (e.g. LIFO or specific identification) for VDAs. Keep a clear record of all buy dates and amounts to apply FIFO correctly.