In cryptocurrencies such as Bitcoin, there is also a confusion as to whether this too will have to be reported when filing an income tax return. Experts say that it depends on many things. Some things have to be taken care of such as the income from the kipotkarnasi and its method.
Under the income tax rules, the profits from cryptocurrency are considered in the category of capital gains or business income. A person associated with this case said that only in two cases, transactions related to cryptocurrency are reported in income tax.
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The case of profit / loss from cryptocurrency becomes capital gainsHe said that first of all it has to be noted that if a taxpayer holds a cryptocurrency and their taxable income is more than Rs 50 lakh, then they have to report the cryptocurrency as an asset in their ITR. At the same time, when they buy or sell cryptocurrency, the profit or loss of it will have to be shown as ‘income from capturing gains’. The advantages / disadvantages of holding an asset for less than 36 months will be considered to be of short duration and the advantages / disadvantages of holding it for longer than that.
Tax is decided on the basis of mining or investment
Another information giving further information about this, explains that there are two types of bitcoin holders. Initiatives are minors and other investors. Minors earn from mining of bitcoin transactions. Acquisition costs are not incurred on selling these mine coins. In section 55, no information has been given about the acquisition expenses. In such a situation, capital gains tax will not be levied on mined bitcoins.
If someone has invested in bitcoin, then the investor acquisition expenses and the sale value is determined when selling the purchased bitcoins. After this, short / long term capital gains tax will have to be paid on the profit / loss on this sale of bitcoin.
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Taxpayers also need to pay attention that individuals with capital gains or those receiving business income through cryptocurrency have to fill ITR-2 and ITR-3 forms for their returns.