How to pay taxes on your cryptocurrency investments in India Cryptocurrency Today Rate In India

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How to pay taxes on your cryptocurrency investments in India

With cryptocurrency prices soaring over the last few years, many Indians have raked in instant wealth. But paying taxes on this income has turned into a nightmare.

This is so because under Indian tax laws, Cryptocurrency Today Rate In India

surveyed several cryptocurrency exchanges in the country to understand their modus operandi and user base. Since then, notices have reportedly been served to

for non-payment of taxes. In the past few months, the bourses, too, have appeared on the

The RBI has forbidden banks from dealing with these exchanges and investors in any fashion, while a panel formed by the

is working on draft regulations for digital currencies. In such volatile times, the exchanges themselves have been urging customers to not skip paying taxes.

As the revised deadline for filing I-T returns approaches, here’s a look at what investors could do.

As the tax treatment of cryptocurrency continues to be in the grey zone, it is open to interpretation, warn chartered accountants (CAs).

“In case of gains, you have to state profits or capital gains made by you from transaction in cryptocurrencies year-wise with statements showing the workings,” read

sent by the I-T department to investors in the last few months. As a result, most chartered CAs are inclined to treat these investments as capital gains tax.

The premise of capital gains is that an investment will be held for a certain period of time so that its value appreciates. These taxes are divided into

“For most investments such as equities, jewellery, land, debt funds, etc. the time period is specified, according to which an item may be taxed under short-term or long-term gains,” said Archit Gupta, CEO of online tax-filing firm ClearTax. “However, since it is not specified, we are going to assume and take the longer time-frame of three years, and only after holding the investment for three years it will be called long-term gains.”

In case of a short-term gain, the amount is added to the income and taxed according to the tax slab that an individual falls under. For instance, anyone who earns over Rs10 lakh ($14,614) will be

If it falls under the long-term category, it will be taxed at 20%. The tax rate can go down further once indexation benefit is applied, which allows one to adjust for inflation during the period these investments were held. Every year, the Central Board of Direct Taxes releases the cost inflation on which these assessments are done.

since details of the tax treatment are unclear Cryptocurrency Today Rate In India , since details of the tax treatment are unclear, Gupta suggests a safer alternative is to report it as income from other sources. In this case, the amount gets added to the salary or business income and then taxes are paid on it as per the slab under which an individual falls.

For a trader, earnings from virtual currencies are treated as income from business.

“Under this, certain expenses related to business, office maintenance, such as buying a computer, internet expenses, office rent, administration cost, etc., can be deducted,” explained another financial planner, requesting anonymity. “Then, on the remaining amount, tax will be applicable as per the slab.”

If you are a trader and your turnover crosses the Rs2 crore mark, If you are a trader and your turnover crosses the Rs2 crore mark Cryptocurrency Today Rate In India