When someone mentions the word cryptocurrency, Bitcoin is usually the first thing that pops up into your head. And yes, Bitcoin is the most well-known and widely used cryptocurrency in the world till date. However, there are more than a thousand other cryptocurrencies that exist in the market today.
With the cryptocurrency hype that is coming up, a lot of people are now turning their attention to the creation of cryptos, and rightfully so. However, there are still some misconceptions about cryptocurrency and its taxation which needs addressing. Here’s a quick guide for you on crypto tax in India.
What Is Crypto Tax?
Cryptocurrency tax is any tax which is levied on transactions made through cryptocurrencies. It is a tax levied by the government on transactions made using cryptos.
Crypto Tax in India
In India, crypto tax was not imposed till now, but there are reports that the government is considering creating it. If this happens, then you have to pay your crypto tax to the government and to make things worse, the monetary authority of India i.e RBI is yet to give any notification regarding how crypto taxes would be collected from people who are indulging in crypto related activities. There is a lot of confusion regarding this matter as of now as different news portals are claiming that cryptocurrency trading will become taxable or not in India.
Now let us take a step back and first see the current tax rules.
What Is The Current Tax In India?
India has become one of the most progressive countries with regards to crypto tax. Till now, there is no such thing as crypto tax in India, but in the future it is expected that there will be no such thing as well as it will start being levied on people who are indulging in cryptocurrency related activities. The upcoming decision by the government would be based on the decision of the Supreme Court of India which is expected to come up after sometime in 2018. In this situation, you can expect some sort of regulatory framework for cryptos and cryptocurrencies by the Indian government which would make it an official means for payment. Hence, there will be different kinds of taxes levied on people who are indulging in crypto related activities.
How Do You Pay Crypto Taxes In India?
It is very hard for the government to track your trades and transactions with cryptocurrencies, so it is very unlikely that people would get verified and pay the taxes which they have to pay. That being said, it is important that you keep a track of what you spend your money on and report it correctly if any cryptocurrency tax comes into existence in future. You can keep a track on your crypto portfolio by using the best crypto portfolio which suits you.
How To Report Cryptocurrency Tax In India?
If a tax notification comes out letting you know how to report your cryptocurrency tax information, then you can do it. You can also report it in the same manner as you report your income taxes or any other forms if tax matters. Make sure that you report all the cryptos transactions properly and if you have to pay any kind of crypto tax, then include it in your income taxes return.
I hope you found our blog helpful. If you are looking to use a crypto portfolio software then I will surely recommend you to use Binocs. Binocs is one of the best software which is available in India and will provide you with an automatic complete taxation solution.