Do You Need To Pay Taxes On Crypto income in india

1. Most of the Indian crypto exchanges advise their customers to declare their crypto earnings, classifying the same as "Income from Other Sources".

2. The Indian government is taking notice of the ongoing Bitcoin bull run, and is reportedly planning to actively tax crypto investors up to 30%.

3. The Indian tax department can monitor earnings of cryptocurrency investors that are registered through KYC compliant exchanges like CoinDCX, BuyUcoin, WazirX, ZebPay, UnoCoin, etc.

Every year, as the date for filing Income Tax Returns (ITR) for the fiscal year 2019-20 (FY20) approaches, crypto investors are left puzzled. While the Indian government hasn’t laid out clear guidelines for crypto investors to declare their earnings, most Indian crypto exchanges advise their customers to declare their crypto earnings, classifying the same as “Income from Other Sources”.

❗ After the Indian Supreme Court revoke the ban from crypto exchanges to provide services for the trading of cryptocurrencies and the use of banks for their services, there has been a huge amount of great increment of investors in cryptocurrencies. Buying and selling cryptocurrency can be considered legal, but actually, there has no law to regulate the earnings from them. And because of this, the current situation in India for cryptocurrency can be considered as neither legal nor illegal. If reports are to be believed, the government is taking notice of the recent price appreciations that happened in bitcoin, ether, and other cryptocurrencies, with the price of the leading cryptocurrency having touched an all-time high of last months and thus it is planning to actively tax crypto investors this year.

According to a report by Economic times, India’s Income Tax Department is tracking investors who are making money from cryptocurrencies this year and is planning to bring the trading of cryptocurrencies under GST, it could demand taxes of as much as 30% on the gains made through crypto. “ZebPay has told our members since 2014 that the tax laws always apply to crypto earnings. We advise our customers to declare their income and be compliant,” ~ Vikram Rangala, Chief Marketing Officer, ZebPay, told Inc42.

It is worth noting that bitcoin’s active trading could be treated as a speculative business and attract normal tax rates. As such, crypto investors are being advised to classify their crypto earnings as capital gains, associated with stocks. Infrequent crypto transactions could be treated as long or short-term capital gains, depending on the holding period. India’s tax authorities haven’t yet categorized returns from cryptocurrencies under any specific bracket.

Conclusion

It is better to declare your earnings made with cryptocurrency or business like Yunus Loop DeFi based on smart contracts. Because this way, when you pay taxes on your earnings, your business becomes completely legal. And it will be more relaxing to everyone that we are not doing any illegal business. There will be no fear of notice from the income tax department later.