FIFO Cost Basis

FIFO means first in, first out. Each disposal is matched to the oldest lot of that asset you still hold, and that match decides the cost of acquisition Section 115BBH allows against your sale value.

Key highlights

Three rules carry the whole method.

Oldest

Lot consumed first on every disposal

First in, first out

Per asset

Pooled across exchanges, not per platform

One pool for each coin

Zero

Cost of a lot you cannot evidence

Section 115BBH(2)(a)

How the Match Works

Buy ETH in May, buy more in August, sell in January, and the May lot is the one consumed. The pool is per asset rather than per exchange, so a lot bought on one platform can be matched against a sale made on another entirely.

Partial lots are where the arithmetic slips. Selling 1.5 ETH out of two 1 ETH lots splits the second lot, and the surviving half carries its own cost forward until you sell it. Tracked in decimal rather than floating point, a lot split five times still adds back to what you paid.

Why No Single Exchange Can Give You This

Because the oldest lot may be sitting in an account the platform cannot see. A report built from one exchange alone produces a different cost basis, in either direction, and one that cannot be reconciled to a return covering your whole history.

Self-transfers change nothing. Moving coins between your own accounts relocates a lot, it does not consume one, and a history that fails to recognise the movement will read it as a disposal and invent a gain that never happened.

What Happens Without Records

Section 115BBH(2)(a) allows the cost of acquisition and nothing else, so a lot you cannot evidence has a cost of zero as far as the computation goes. The whole sale value becomes gain, and 30% plus cess runs against money you never made.

That single consequence is why acquisition records matter more in this part of the return than anywhere else in it.

Frequently Asked Questions

The questions this term raises most often.

FIFO is the method in general use for matching VDA disposals to lots, and it is the method CryptoKar applies across your full history. Section 115BBH itself allows the cost of acquisition without prescribing a matching method, so where a specific history raises a question it belongs with a chartered accountant.

No. The pool is per asset across every account you hold, which is why a report from a single exchange cannot produce a cost basis that reconciles to your return.

It splits. The consumed part goes into the disposal being computed and the remainder carries its own cost forward until a later disposal reaches it.

This page states the law and what CryptoKar computes from your trade history. It is not tax advice. Judgment calls belong with a chartered accountant. Sections and dates here were read against the source on 21 August 2026.

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