If you are an Indian yourself or someone who is looking to make some crypto investments in India, you probably already know how tenuous the government’s equation is with the world of cryptocurrencies. Although reports suggest that an expert committee is framing crypto-related regulations for India, we have no idea as to when they would be revealed or put into effect. As a result, crypto users are also quite clueless about how Bitcoins are taxed in India.
You May Also Read: What To Look For Cryptocurrencies In India In 2019?
Even though the detailed set of regulations is yet to arrive, chartered accountants around India are following a more or less uniform standard when it comes to applying taxation laws of the land to Bitcoin investments (or investments in any similar cryptocurrency).
Till the authorities come up with a concrete plan of action after having studied cryptocurrencies and cryptocurrency exchanges, the taxation is likely to follow the scheme adopted by most chartered accountants knowledgeable about this matter.
How Are Bitcoins Currently Taxed To India?
Since no specific laws in the country exist yet to deal with the matter of cryptocurrencies, they are treated as any other form of investment is, in the country, ranging from equities to land.
Any profit earned because of an investment made in Bitcoins or similar cryptocurrencies are filed as subject to “capital gains tax”. This is because any kind of profit earned on an investment in this country is usually represented as a capital gain and treated accordingly.
You May Also Read: Do You Have To Pay Crypto Taxes In The UK?
Now capital gain be shown as either being a short term capital gain or a long term capital gain. The long term capital gain (received over a period of three years at least) entails a taxation as per the slab of 20% taxation. In case of short term capital gains (with overall income being above 10 lacs per annum), the taxation would be 30%.
Under the current standard, chartered accountants prefer to represent cryptocurrency investments as a long term investment (given the extreme volatility of the market, one must hold their virtual assets for a while before substantial profits may be earned) and tax them under the 20% slab.
In any case, given how poorly cryptocurrencies have been performing of late, it is unlikely anyone would have to go through much taxation for Bitcoin investments now, before the regulations come out. Despite that, it is good to remain informed, just in case some profits do come your way.
Here Are A Few Other Articles For You To Read Next:
Leave a Comment