Business

Income Tax: Can cryptocurrency be shown as foreign earnings in ITR? what does the rule say

Income Tax: Can cryptocurrency be shown as foreign earnings in ITR?  what does the rule say

Tax rules on trading of cryptocurrencies (symbol)

If you do mining of crypto, then it will also have to be shown in ITR considering it as trading. Even if you show crypto in foreign asset, it will have to be mentioned in the ITR.

TV9 No.

  • TV9 No.
  • Updated On – 8:46 am, Mon, 27 September 21Edited By: Sanjeet Kumar
    Follow us – google news

Most of the experts believe that whether you make a profit from cryptocurrencies or you may lose, both the things must be shown in the Income Tax Return (ITR). Although cryptocurrency is not legal in India yet, it is not clear in which column the investment of cryptocurrency should be shown in the ITR. If cryptocurrencies are not traded and there is no loss or profit on it, then what will be the rule of ITR, it is not clear yet.

The current rules of income tax say that whatever your income, you have to give information about all your foreign properties in the ITR. The question is, when you are filing this year’s ITR, it is necessary to show the investment of cryptocurrencies in it? Regarding this, the rule of income tax says that if a person’s net taxable income is more than 50 lakhs, then he will have to give complete information about his assets and liabilities in the ITR form.

what are the rules

The second rule states that if a person has invested in foreign stocks, such as in any American stock, then he has to give details of his entire assets and liabilities in the ITR. If that person has any foreign asset or takes advantage of any foreign property or has a signing authority in any account outside the country, then he will have to give full information in ITR. Even if his total earnings are less than the tax limit, but he will have to give complete information about foreign assets in ITR.

Cryptocurrency is not legal in India

Whether cryptocurrencies should be reflected in foreign earnings, it is said that it is not yet clear whether the holding of cryptocurrencies will be considered as property of India or abroad. If the cryptocurrency is treated as a foreign asset, it has to be shown in the ITR. Irrespective of his earnings, whether he comes under the tax net or not. Since cryptocurrencies have not received any legal status, it is more likely that it will be held in an asset or commodity. If a person trades it, then it will be considered as business and the income from this will be taxed like business income.

Fear of getting caught in Black Money Act

Whether cryptocurrency earnings will be considered long term or short term will depend on how many days after it is being sold. Accordingly, tax will have to be paid keeping in view the capital gains. If you do mining of crypto, then it will also have to be shown in ITR considering it as trading. Even if you show crypto in foreign assets, it will have to be mentioned in the ITR. If you do not show crypto in ITR, then it can come under Black Money Act and action can be taken against you accordingly.

Here is the tax law

After 3 years if a person sells cryptocurrency investment, then he will be taxed according to long term capital gains. Long term capital gains will be taxed at 20%. If the cryptocurrency is sold before 3 years, then it will be taxed on the basis of short term capital gains. If there is a lot of buying and selling, ie cryptocurrencies are being bought and sold rapidly, then it will come into business. In such a situation, the tax will have to be paid only as a business. If someone has bought cryptocurrency and is selling it after many years, then it will come under the category of investment and will have to pay tax accordingly.

read this also: There is so much loss due to internet shutdown for 1 hour in India, 20 thousand crore rupees drowned in 1 year

.

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0
Shehnaz Ali
Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.

You may also like

Comments are closed.

More in:Business