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Cryptocurrency And Tax Challenges That Come With It
Crypto currency, as we very well know as bitcoins, is the latest buzz word in the market today. These are popular means to save taxes. Now that it’s time for income tax return filing in Delhi, if you are using crypto currency, this article is for you.
Most tax regulating authorities consider bitcoins as an illegal way to launder money. Supreme Court too, has discouraged people from using the same time and again. Not only India, countries like USA and China too have banned the use of bitcoins.
But if you do not know what crypto currency is, fret not. Here is all that you need to know about Crypto currency and taxes!
Crypto currency - What is it?
The currency goes by its name, and uses encrypted codes to make a transaction. These codes are well identified by certain user portals. In these recognized portals, people use crypto currency rather than using paper money. An online book keeping record is maintained where in the user account is debited or credited.
How do you do transactions on Crypto currency?
When a user begins a transaction, the computer sends out a single that allow the other person to receive a currency. If the transaction is accepted by the user, the transaction is completed.
Bitcoin is one of the most popular forms of crypto currency being used as of now. These can be used easily on mobiles too, making them largely popular. The receiver merely has to scan the QR code from smartphone and perform the transactions. Transacting through Bitcoins is simple and as quick as using a PayTM wallet or Google Pay. These are also accepted all across the globe and are secure, making them a favourite of users. Another reason for their popularity is the fact that they are not controlled by Central Bank. This ensures there is no inflationary pressure on crypto currency, unlike currency notes.
How Crypto currency makes money laundering possible?
Since it is not controlled by banks or tax authorities, the transactions are not directed to a person. Hence, there is no legal way to find out if the person has obtained the value legally.
Indian Law and its take on Crypto Currency?
Crypto Currency is considered as a software and hence, comes under the Sale of Goods Act 1930. Since it is considered to be a good, it is privy to indirect taxes. GST is also applicable on its sale.
Whether these currencies are valid in India or not is a matter of severe discussion. The authority of clearing the payments is under RBI regulations.
A crypto currency received by an Indian resident is subject to Foreign Exchange Management Act 1999. Bitcoin trading has been allowed in India only with special permissions for tax evasion. Some of these exchanges are Unocoin, Coin secure and Zebpay. If you are planning to invest into these Bitcoins, you will need to pay taxes on dividends received. To understand how much taxes, you are liable to pay, you can get in touch with experts of ITR filing in Janakpuri.
If you are planning to put a large investment in crypto currency, it is a good idea to consult a professional? You can take guidance from experts in income tax return filing in Janakpuri.
Call to action:
Have you been confused about Crypto currency investment and its tax compliances? www.manishanilgupta.com can offer unbiased advice and guidance on the matter.
Read more info about the Audit firm in delhi http://manishanilgupta.com/audit-assurance-services.php
Also, read more info about the Income tax return filing in Delhi http://manishanilgupta.com/income-tax-services.php
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