Categorising Transactions

Here’s something a lot of crypto users don’t realise: the category of a transaction determines whether it’s taxable, how much it’s taxed, and where it shows up in your tax report. Getting this wrong is one of the most common reasons a tax report looks off. This article explains how KoinX decides a transaction’s category, how to fix anything that’s been miscategorised, and walks through the four scenarios that cause the most confusion.

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How KoinX Decides a Transaction’s Category

KoinX uses three signals to auto-categorise every transaction: 1. The exchange API label Most exchanges tag their own transaction data: buy, sell, deposit, withdrawal, expense. This label is sent directly to KoinX. When this data is present, KoinX trusts it. 2. On-chain data patterns For blockchain wallets (MetaMask, Ledger, Phantom, etc.), KoinX reads the smart contract interaction to figure out what happened. A Uniswap swap looks different from a simple ETH transfer at the contract level. 3. Your Tax Settings The global toggles you’ve set, like “Treat Airdrops as Income” or “Treat Reward as Income”, tell KoinX how to handle entire categories of transactions across all your accounts.

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Transaction Types and Labels: What Each One Means

KoinX uses two distinct concepts: Transaction Type and Label. The Type is the broad category (set by the exchange or blockchain data). The Label is a more specific tag you apply to give it meaning. Labels available change depending on the Type. The 6 transaction types in KoinX are: The Label is what you apply within a Type to tell KoinX what kind of deposit, withdrawal, or trade it actually is, for example, labelling a Deposit as an Airdrop, or a Withdrawal as a Transfer. This is what drives the tax treatment.

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How to Change a Transaction’s Category

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Internal Transfers: The Most Common Source of Confusion

Moving crypto from your Binance account to your MetaMask wallet is a Transfer: not a sale. Nothing was sold. No taxable event happened. You’re just moving your own assets. But KoinX sometimes misclassifies this because it needs to see both sides of the transfer to confirm it’s an internal move:

• The withdrawal from Binance (your exchange)
• The deposit into MetaMask (your wallet)

If only one side is visible (because one of those accounts isn’t connected to KoinX), the deposit looks like a new acquisition and the withdrawal looks like a disposal. Both will be taxed incorrectly. How to fix it: Connect both the sending and receiving accounts to KoinX. Once both sides sync, KoinX automatically matches them as an internal transfer and removes the incorrect taxable events. For transfers that still aren’t matching automatically, go to Tax Settings → Internal Transfer Settings to adjust the matching configuration. Here’s what each setting controls:

• Time Window for Automatic Matching: The maximum time gap (in minutes) between a withdrawal and deposit for KoinX to consider them a matched pair. Default is 120 minutes. Example: withdrawal at 2:00 PM and deposit at 4:00 PM, matched if the window is 120 minutes.
• Maximum Amount Difference (%): The allowed percentage difference between the withdrawal and deposit amounts, to account for gas fees or slippage. Default is 5%. Example: 100 MATIC withdrawn, 96 MATIC deposited, valid at 5% threshold. 100 withdrawn, 85 deposited. Not valid, exceeds limit.
• Strict Timestamp Ordering: When enabled, the withdrawal must occur before the deposit for KoinX to match them. Example: withdrawal at 2:00 PM → deposit at 2:30 PM = valid. Deposit at 2:00 PM → withdrawal at 2:10 PM = not valid.
• Reverse Timestamp Threshold: Only active when strict ordering is disabled. Defines how many minutes a deposit can appear before a withdrawal and still be matched. Example: deposit at 1:58 PM → withdrawal at 2:00 PM = valid if the reverse limit is 5 minutes.

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The 4 Most Common Miscategorisation Scenarios

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Scenario 1: Airdrop not labelled correctly

What happened: Tokens were airdropped into your wallet. KoinX correctly records this as a Deposit (which is the right transaction type for any incoming crypto). But the Label may not have been set to Airdrop, which matters for tax treatment. Why it matters: An airdrop is taxable income in most jurisdictions at the time of receipt. Without the Airdrop label, it won’t be treated correctly in your income report. How to fix it:

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Scenario 2: Staking reward showing as a Deposit without the right label

What happened: Your staking reward arrived in your wallet and KoinX logged it as a Deposit, which is technically correct for the type, but the label may not reflect that it’s a staking reward. Why it matters: Staking rewards are taxable income at the time they’re received. Without the right label, the reward won’t appear in your income report correctly. How to fix it:

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Scenario 3: Staking and Unstaking

Staking involves two separate transactions: locking your crypto into a pool, and getting it back later. KoinX has specific labels for both:

• Sent to Pool: apply this to the original transaction where you staked (sent crypto into the staking protocol)
• Received From Pool: apply this to the transaction where you received your assets back on unstaking

How to fix it:

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Scenario 4: P2P trade showing as a Deposit

What happened: You bought crypto from someone directly (peer-to-peer) and the coins just appeared in your wallet. KoinX has no exchange record of the purchase, so it logs the incoming crypto as a deposit. Why it matters: A deposit has no cost basis attached to it. A buy creates a cost basis, which you’ll need when you eventually sell. How to fix it:

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Common Issues / Edge Cases

Changing the label doesn't clear the warning

Labels and warnings solve different problems. A label tells KoinX what kind of transaction it is. A warning tells you that some data is missing or inconsistent. If you relabelled a transaction but the warning is still showing, it usually means there’s still a missing price, a ₹0 cost basis, or an unmatched transfer. Check the Transaction Warnings & Errors article to resolve it.

I relabelled a staking reward but it's not showing in my income report

After relabelling, you need to regenerate your Tax Report for the changes to appear in the final numbers. Also check that the Treat Reward as Income toggle is enabled in Tax Settings. Both need to be correct for the reward to show up in your income section.

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Frequently Asked Questions