AdvertisementSummary: The article examines the taxation of cash-settled crypto futures and options under Sections 2(47A), 115BBH, 2(47) and 43(5) of the Income-tax Act, 1961, along with the Finance Bill, 2022, its Memorandum and CBDT Circular No. Taxation of Crypto Futures & Options under the Income-tax Act, 1961: A Study of Section 115BBH, Section 2(47A) and Section 43(5)IntroductionThe Finance Act, 2022 introduced a dedicated taxation regime for Virtual Digital Assets (VDAs) by inserting, inter alia, Sections 2(47A), 115BBH and 194S into the Income-tax Act, 1961. It does not specifically refer to crypto futures, crypto options, derivative contracts or contracts settled otherwise than by delivery. Legal Character of Cash-Settled Crypto Futures and OptionsA spot cryptocurrency transaction and a cash-settled crypto derivative are legally distinguishable. ConclusionThe taxation of cash-settled crypto futures exposes a specific gap between the statutory VDA framework and the evolution of digital-asset derivative products.