Indian bitcoin investors may be taxed

nRunaway Commentary: Earlier this month, the Reserve Bank of India (RBI) once again issued a warning about Bitcoin transaction, careful to remind the public digital currency (especially bitcoin) the potential economic, financial, operational, legal, customer protection and security-related risk. Affected by this, the domestic bitcoin investors in India have started selling Bitcoin. Investors later found that they may need to pay taxes on the proceeds from the sale of bitcoin, but experts believe it depends on whether the digital currency is treated as a business income or capital gain.n
nTranslation: Clovern
Indian investors found that after the Reserve Bank of India (RBI) issued a warning about bitcoin trading, they may need to pay their taxes after selling Bitcoin.n
Earlier this month, the country’s central bank issued another warning to the public reminding the public to beware of the risks posed by digital currencies, especially bitcoin. In a December 5 announcement, RBI warned adopters of “potential economic, financial, operational, legal, customer protection and safety related risks” using virtual currency.n
As a result, many investors started to sell their currencies, including S Shridhar, a US IT company engineer in Bangalore. Following instructions from the RBI, Shridhar sold 20 bitcoins on Friday, bringing the total to Rs 21.8 crore as of press time. However, his tax consultant later informed him that he might have to pay taxes because Shridhar transferred all of his trading income to his bank account.n
Experts believe crypto-currency gains can generate as much as 20% -30% of taxes, but it depends on whether digital currency is treated as a business income or capital gain.n
Jeenendra Bhandari, partner at tax consultancy MGB, explained:n
n”If anyone sell bitcoins, whether their income will generate revenue depends on whether the intention to transfer their earnings classified as business income or capital income. Income Tax Act to determine the tax rate needed Bitcoins no particular amendment.”n
nNot only that, according to Ashok Maheshwary u0026 Associates LLP Chartered Accountants Partner Amit Maheshwari said the tax department can consider digital currency exchange was regarded as business income, business and speculation as to its cause regular tax rate. He added:n
n”If someone sells Bitcoin and deposits it in a bank account, it will generate a long-term capital gains tax or a short-term capital gains tax based on the holding period.”n
nMaheshwari said that if the token was held for at least 36 months, it would be able to levy a 20% long-term capital gains tax on it. For short-term capital gains, it will increase by 30%. Due to a warning issued by the RBI, Indian people are eager to sell bitcoin. At this point, Indian retailers are still adopting bitcoin fast despite the soaring premium.n
However, while Bitcoin is not considered illegal in India, it has not been legally recognized. Formally because of this ambiguous attitude, the Supreme Court of India called on the government to issue clear guidelines on the use of Bitcoin to “regulate the movement of Bitcoin in the country.”n

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