• Capital gains tax - NRI

Hi, I am Sri Harsha a NRI living in the UK and I would like to know my income tax obligation in the below scenario- I am in investor in Bitcoin in UK. 1) Buy the digital currency (Bitcoin) in UK. 2) Send the digital currency to my Bitcoin wallet in India. 3) I sell the digital currency (Bitcoin) from my Bitcoin wallet in an Indian Bitcoin exchange like Zebpay or Unocoin. There is a captital gain made (X percent ) after the sale of the Bitcoin in the Indian exchange like Zebpay. 4) I withdraw the principal and captial gains from my Bitcoin sale from my Bitcoin Indian wallet to my NRO account 5) Transfer funds from NRO to NRE account and repratriate the funds from my NRE account to my own UK Bank account if needed.

 Question: 1) Should i need to pay tax on the captital gain In India that i made by buying the Bitcoin In UK and selling the same in an Indian exchange or can I repatriate the funds to the UK and declare them here? If I should pay the capital gains in India, what rate will I be taxed? 

 Please advise. Thank you
Asked 9 days ago in Capital Gains Tax

- Income from sale of bitcoin is a business income irrespective of volume and frequency of transactions. Tax is payable on the income accrued or received in India.  As the income is first received in India and the amount is received in NRO account, tax is payable on such income in India . You can claim the benefit of DTAA in USA while filing ITR. 

 

- For detailed discussion, please contact personally.

Vivek Kumar Arora
CA, Delhi
3936 Answers
294 Consultations

5.0 on 5.0

Hi,

 

The taxation would depend upon the fact whether the income would be treated as business income or capital gain income. If its treated as capital gain income taxes then you will have to pay capital gain taxes in India.

 

However if it's treated as business income then you can take an argument that since you do not have place of business in India, the income would not be taxable in India.

 

whether it can be treated as business income or capital gain income would depend upon various factors such as number of transactions and volume of transactions during the period, your intention (i.e. I want to make profit or you want to hold your investments that much money grows). 

We can discuss in detail over a call, if required


The rate of capital gain tax is 20%

Lakshita Bhandari
CA, Mumbai
5367 Answers
440 Consultations

5.0 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

It would be treated as business income in India.

 

You need to pay the taxes on same as per applicable slab rate.

 

However, you can claim the foreign tax credit while filing ITR in India.

 

In accordance with Rule 128, in order to claim FTC, the taxpayer is required to file following documents on or before due date of filing of return:

1. A statement of :

  • foreign income offered to tax
  • foreign tax deducted or paid on such income in Form No. 67

2. Certificate or statement specifying the nature of income and the amount of tax deducted therefrom or paid by the taxpayer :

  • From the tax authority of the foreign country
  • from the person responsible for the deduction of such tax
  • signed by the taxpayer

3. Proof of payment of taxes outside India.

 

We may assist you in entire procedure.

 

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

Payal Chhajed
CA, Mumbai
5010 Answers
120 Consultations

5.0 on 5.0

Legally the income would accrue in India as you are selling it in indian exchange and for NRI also any income which accrue in India is liable to tax in India.

The rate would depend on type of gain.

 

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement. You can even book a phone consultation for better discussion.

Thank you.

Naman Maloo
CA, Jaipur
3751 Answers
43 Consultations

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