Question on Bitcoins
I would like to know:
1. Whether trading in Bitcoins is legal in India?
2. How would the profits through this be handled in the tax filing?
3. Similar to Bitcoins, how would profits through internet sales like android app sales be handled in tax filing? These are apps I have created in my personal capacity and not a formal business.
Asked 1 year ago in Income Tax from Bangalore, Karnataka
1) To my knowledge there is no ban on trading in bitcoins under Indian laws.
2) If the transaction of sale is carried out as normal business activity, then the profits from such transaction would be offered as income from business. If the bitcoins are held as capital asset, then sale of such assets will attract capital gains tax either long term or short term. If it is done as a casual activity, income from this may be offered as income from other sources.
3) If the apps are sold as commodity as a business, then income from this can be offered abs business income and all the expenses for this can be claimed as deduction against profits from sale of apps. It need not be formal business, but before embarking on selling activity, you have decide whether it is trade or
casual activity once in a way.
Talk to Vijay N. Kale
4.9 on 5.0
1 If any transaction is not having transfer of legally accepted currency, then it is more like a barter system. As such there is no ban on trading in Bit coins in India but at the same time there is no specific permission to trade in Bitcoins in India.
2 The profits or losses will have to be determined on the basis of monetary value of the products that have actually been transferred or held during the year by the assessee. The taxability of such transactions depends mainly upon the nature of transaction, such as personal use, business purpose and as a capital asset.
3 Though you have created apps in your personal capacity, the profit on sale of such apps will have to be still considered under the head Profits and Gains from Business or Profession.
Talk to B Vijaya Kumar
5.0 on 5.0
Bitcoins trading is not allowed in India.
Talk to Shyam Sunder Modani
4.9 on 5.0