An engineer employee working in an American IT company Bangalore Mr. S Sridhar selling 20 bitcoins last Friday against RBI warning to experience a fall in value as only to be told by his tax advisor that he could be in trouble .
This 36 year old engineer together with his advisors are now to figure out that the return on such investment on selling bitcoins will be taxed ??? If so with how much percentage ??
The income from Bitcoin earning is yet to be decided whether to be treated as income from business or income from capital gains .
Sridhar being one of the rising citizen in country rushing to sell their Bitcoin holdings even there is no clarity on tax implications on this investments .
Experts says it may attract as per 20-30% tax as per whether this income will be treated as capital income or business income .
The gains would definitely attract taxation depending on to categorize it's gains .
The income tax law for now has no such amendment as to determine the earning as per how to be taxed .
As this return will come to bank accounts they can be taxed as per long term or short term gains as per the holding .20% to be levied if it's of long term and 30% if it's of short term nature as per expert news.
With the advance tax deadline on 15th December the tax advisors are still on thinking on how to deal with investments in crypto currency .
GST fear - will it also attract goods and services tax ???
While some officers say that there is no point on levying GST .
But the transaction fee on purchase or sale of GST or the underlying transaction for which it is used will be liable to GST.