Tax on Cryptocurrency: If you have invested in digital currency, then know how to pay tax, what will happen if you do not pay it?
Tax on Cryptocurrency: Recently the deadline for filing income tax returns for individual taxpayers has been extended till December 31. There are many such taxpayers who have made big money by investing in cryptocurrencies. In such a situation, there is a situation of confusion about how that income will be taxed. The position of the government regarding cryptocurrencies is not yet clear. However, according to media reports, it is believed that it will be given the status of a commodity in the cryptocurrency bill and all the rules ranging from tax will be according to that.
If you have also invested in cryptocurrencies, then you should know about the opinion of tax experts on whether you should pay tax on the earnings from it and if you do, then on what basis to pay tax. TaxBuddy's Sujit Bangar, in a conversation with CNBC TV18, said that the income earned on investment in cryptocurrencies can be taxed in two ways. They say that the same rules apply to tax on cryptocurrency holdings as are applicable to capital assets as per section 2(14) of the Income Tax Act.
Share cryptocurrency investing information
Bangar said that if a taxpayer has invested in cryptocurrencies and his taxable income is more than 50 lakhs, then such taxpayers should disclose the digital currency investment in the income tax return filing. When he sells the cryptocurrency holdings, he will either lose or gain. At the time of filing tax return after sale, as per capital gains rule, tax should be paid.
capital gains tax rules
Talking about capital gains tax rules for cryptocurrencies, if the holding is less than 36 months then it comes under short term capital gain. If it exceeds 36 months, then it is called long term capital gain. Tax will be levied according to which category the taxpayer's investment falls in.
No capital gains tax on miners
Rajasekhara Reddy of Pallala Chartered Accountant and India Filings said that bitcoin holders can be of two categories. The first could be bitcoin miners, while the other would be investors. In case of mining, when he sells bitcoin, it will not be called capital gain. Overall, tax experts say that if you have a portfolio in cryptocurrencies, then give this information in the return filing. Also, take the help of an expert before filing the return so that the taxpayers do not face any kind of problem.