Taxability of crypto fund

Company registered in UK will be treated as foreign company in India. In case of foreign company, income received or arises in India will be taxable under India Income tax. Further, foreign company will be treated as resident in India only if the place of effective management is in India. In case of resident status, global income will be taxable in India which results into application of DTAA between India and UK.

Absolutely NO.

If it's established that it's principal place of business is in India then it's income would be taxed in India which would also depend on DTAA between India and UK.

However your income from such company would be taxed in India.

Still it's not banned so you can trade Cryptocurrency but the law is on its way. Currently you only can't use Cryptocurrency as a medium of exchange.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Hi,

Considering that you will be the whole and sole owner of the company being managed from India, the place of effective management (POEM) of company will be in India and company will also be taxed in India. Although, there is a threshold of 50 cr. Before POEM rules are applied. Futher, it will also be taxable in UK and you can take tax credit of taxes paid in India in UK.

However, it can still be applied by revenue authorities. Hence it's better if you can appoint some person in UK with some powers for day to day operations.

Dear Sir,

Hope you are doing well !!

A company, whether Indian or foreign, is liable to pay CIT under the country’s Income Tax Act, 1961. While a resident company is taxed on its worldwide income, a non-resident (foreign) company is taxed only on income that is received in India, or that arises, or is deemed to accrue in India.

The following parameters determine the CIT liability of companies in India.

Residency status of a company

Previously, a foreign company was considered a resident company only if the control and management of their affairs were wholly situated in India in the financial year. Companies that were partly or wholly controlled and managed from outside India were treated as non-resident companies. This was amended by the Finance Act of 2015 to align the rules with international best practices.

As per the current norms, an Indian company is defined as resident under the following conditions:

A company is said to be resident in India in any previous year, if –

• It is an Indian company; or,
• Its Place of Effective Management (PoEM), in that year, is in India.

PoEM is the place where key management and commercial decisions are made, particular decisions that are necessary for the conduct of the business of an entity as a whole. This PoEM rule came into force on April 1, 2017. However, it has been provided that the POEM guidelines shall not apply to a company having turnover or gross receipts of INR 50 crores or less in a financial year vide CIRCULAR NO.8, DATED 23-2-2017.

However, you can claim the credit of taxes paid on the basis of DTAA between India & UK/

CIT rate

A flat 30 percent CIT plus a surcharge, education cess, and secondary and higher education cess is applied to resident enterprises.

No it is not legal to operate crypto trading company in India.

Hello,

If it has a place of effective management in India, then it would be considered as a resident company. And your income in both countries would be taxable in India. DTAA between UK and India would be used. You can get the credit of tax paid in either country as per DTAA.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani