The surge in popularity of cryptocurrency in recent years has been astonishing. With more people using Bitcoin, Ethereum and other decentralised digital assets, it is important to know how to pay your Cryptocurrency tax in India. This article includes all the details you need about tax obligations for cryptocurrency investments and trading. This includes a comprehensive breakdown of which cryptocurrencies are taxable, as well as how much capital gains should be declared for the purchase or sale of each respective coin.
The growth of cryptocurrencies, just like in any other investment, will have its benefits and downsides. Like the conventional currencies, it has its own fluctuating prices and sometimes its exchange rates can be volatile. It is important to be aware of these things.
How Do You Treat Cryptocurrency In India?
You can purchase cryptocurrency through various ways. This can be done by accepting cryptocurrencies as a payment or by mining them or even by buying them from a cryptocurrency exchange. The difference between this and conventional investment lies in its anonymous nature, which cannot be traced back to you with details about your identity and financial history. It is even possible to transfer the money anonymously without having any paper trail. This raises many questions about cryptocurrency tax in India.
How Are Cryptocurrencies Taxed In India ?
India recently made it legal to use and trade cryptocurrencies in a report that was released by the country’s law commission on July 23, 2018. Under the new law, both the government and private citizens will be able to trade digital currencies such as Bitcoin and Ethereum. The news came as a big surprise because it was being rumoured that the government may actually ban cryptocurrencies throughout the country due to various risks associated with them.
The new cryptocurrency tax in India will be applicable if you are trading or using it for any services or goods and it will be subject to capital gains tax. The goods and services which you may use using cryptocurrency as a payment can be anything from paying electricity bills to transferring money across the borders.
The government is trying to minimise its risks with the use of cryptocurrency and they are also seeking any loopholes in its taxation laws regarding this new form of investment. As it stands, it is not clear whether or not the government will allow you to declare them as your income.
How To Pay Crypto Tax In India?
After the introduction of crypto taxation in India, many people search for how to pay taxes on cryptocurrency? Answering to this question there are mainly 2 methods which you can use to pay crypto tax in India. The first method is the manual method. In this method you will have to calculate the tax on net profit and then will have to file on the official website of the Indian Government.
The second method is the simplest method. In this method you will be required to use a service like Binocs, which will automatically calculate and file your crypto tax on the fixed tenure. There are many service providers which allow you to do so, but Binocs is one of the most reliable platforms to do so.