• Cryptocurrency income tax

I want to buy and sell cryptocurrency , the tractions is high amounts. monthly 30 lakh . how to pay income tax and is it legally or not for buy and sell cryptocurrency in India
I need the expert who know crypto very well and specialists contact me. as I need the CA advice also for long term .
Asked 3 years ago in Income Tax

- Cryptocurrency is a derivative. Income from trading is treated as business income.

- Now it is legal to trade in Cryptocurrency.

- You should maintain proper books of accounts and get them audited if required.


- There is no issue in such high transactions.

Vivek Kumar Arora
CA, Delhi
4863 Answers
1052 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

Yes, it is legal.

 

The income would be treated as business income. 

 

We may assist you in entire procedure.

 


It is advisable to take a phone consultation for detailed discussion.

Payal Chhajed
CA, Mumbai
5188 Answers
291 Consultations

5.0 on 5.0

The simple and straight forward answer to your question is that crypto currency is not a legal tender in India but trading in crypto currency is regulated through exchanges following recent Supreme Court judgment. However, there are indications to the effect that the Government of India may ban crypto currency trading, though the Bank and RBI confirmed that crypto currency is legal in a statement made in the Parliament. 

The situation in India is still fluid and lacks clarity on various issues. It needs close monitoring on regular basis. You may follow these interesting articles on trading in crypto currencies in India:

https://news.bitcoin.com/bitcoin-legal-india-supreme-court-verdict-cryptocurrency/#:~:text=Both%20the%20government%20and%20the,Parliament%20Member%20Dr.

 

https://www.thehindubusinessline.com/news/national/crypto-exchanges-bet-big-on-india/article33175111.ece#

 

So to say, the future of crypto currency in India is uncertain and challenging. 

As regards the tax implications, my views are as follows:

As the crypto currency is not a legal tender in India, the holding of crypto currency is a business asset or a capital asset depending upon the nature of your trading and intentions. Thus you will be liable to pay tax on your income assessed under the head "Income from Business or profession" or under the head " Capital Gains". 

In the case of income under the head: " income from business or profession",  you will be paying tax on your business income at the rates as applicable to you on slab basis. In the case of capital gains, it may be short term or long term. Short term capital gains are taxable at the rates applicable to you on slab basis and in the case of long term capital gains, it may be 10%,  if indexation is not applied and 20%, if indexation is applied. 

As you mentioned that you want to trade in crypto currency regularly in large volumes, most likely it will be business income only. You may also have to consider if you want to do this trading as an individual or as a firm or as a company. 

 

B Vijaya Kumar
CA, Hyderabad
1007 Answers
124 Consultations

5.0 on 5.0

Dear Sir,

 

Here are my replies to your queries:

 

1. Cryptocurrencies are now legal in India and regulated through exchanges following recent Supreme Court judgment.

2. Income from "Trading in cryptocurrency" will be considered as Business Income.

3. Tax on Business Income will depend upon the nature of entity who is doing the business. If nature of the entity is  

- Individual- Tax Rate will be as per the applicable slab rate.

- Partnership- 30%+4% (EC)

- Company - 25%+4%(EC)

 

Thanks and Regards

Divya Chugh 

Divya Chugh
CA, Noida
190 Answers
3 Consultations

5.0 on 5.0

If money held in the form of cryptocurrencies is transferred in return for real money, the same rules applicable to income from capital assets, such as long term capital gains tax, will be applicable. Long term gains will be taxed at a flat rate of 20 percent, while those accrued over a shorter term will be taxed according to the slab.

 

Ajit Kumar Jain
CA, Mumbai
26 Answers

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA