This post is very important whoever attached to cryptocurrency filed by as a trader or a miner. Few people are still confused on this Income Tax Issue on Cryptocurrency in India. Then how to paid Income-tax on cryptocurrency?
Then we have to first understand that how we can earn or gain our Bitcoin or cryptocurrency. We have to understand this because then only we can go through certain criteria.
These are the following three ways to get Bitcoin/Cryptocurrency.
- By Mining Process
- We invest money in exchange & get the cryptocurrency.
- We accept cryptocurrency in give & take of any goods & services.
Did you know gains from bitcoin is treated as capital gains and hence taxed?
Lets consider Income Tax Cenario
1st Category – If We are a Miner then we are creating Bitcoin/Cryptocurrency hence this income comes to Self Generated Category. It will comes under Capital Gain Category. But for mining purpose, we have to spend money so I think for mining perpose provisions of capital gain could not be applicable. Hence we can show this Bitcons earning that Income form Other Sources.
2nd Catogory – In India the numbers on miners are very few as compared to cryptotrader’s who already invested their large amount in Crypto Market. Hence investment in exchange can comes in 2 different catagories i.e. 1) Long Term Capital Gain & 2) Short Term Capital Gain
Long Term Capital Gain – If we hold cryptocurrency for 3 Years (36 Months).
Short Term Capital Gain – Whichever income generated Income tax should paid as per Income Tax Slab.
The cost of aquacition for Long term Capital gain in this case will be deremined when you gave a benefit of induxestion . Ex. (If We by 10 Bitcoins from on exchange. At that time the value is 32.72 Paisethe 10 Bitcoins costs you 327.20 Paise, & when you going to sell those bitcoin at that time the Bitcoin price was 38.72 Paise Hence you get 6.00/-Rs. Proft of 1 Bitcoin. Hence you get total profit or Capital Gain 60/- Rs.) Hence for Long term capital gain, I think income tax should be 20% & Short term as per the Taxation Slab.
Profited from Bitcoins or other Cryptocurrencies and not sure how to file your income tax returns?
If Income Tax Derpartment not consider the Cryptocurrency as a Capital Assets then it will comes under In come from other sources. Then we have paid income tax as per the government rule i.e. Income from other sources. Here I want to mentioned that if the Income is more that 10 Laks then we have to pay 30% on the whole income.
Hence If Capital Gain Tax then 20% otherwise Income form other sources 30% income tax we have to pay for our cryptocurrency.
People who trade regularely they will come under Buisiness category & they will have to pay there income tax as per there individual Income Tax Slab. Here criteria is if income about 2.50 Lakh noTax & Income more than 10 Laksh then 30% Tax have to pay. You should now in whitch tax slab you are coming or Here we have check that how much is our income & concern with our C.A. to file RTI.
3rd category:- Now we talk about bitcoin/cryptocurrency gain by Goods & Services. Here I want to clarify that it will assume that you are taking money against Goods & Services. Hence whaterever the criteria for bye & sell good services the same Taxation Slab will be applicable to this category. This is also assume that income out of Busineess or Income out of Profession. Then Pay Income Tax as per Business Criteria Income Tax Slabwise Shedule.
If u want more information then you can go through the below link to get more information.
Source : https://cleartax.in
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