Finance

How to Pay Tax on the Bitcoin Gains

How to Pay Tax on the Bitcoin Gains

Suppose you hold BTC for over 36 months, the long term gains tax might be applicable to you. ITR2 and ITR3 are being used for filing the bitcoin tax was bullish for the bitcoins, the highly popular cryptocurrencies across the world. For first time, cryptocurrency was very close to touching at $20,000 / 13.4 lakhs INR, for the bitcoin. Right from the tea seller to the wealth managers, everyone wants to explore this space. From December 2017, BTC prices have tumbled on. At present, it hovers over $6,000, if you want to exchange BTC to INR. But, a few bitcoin holders managed getting very good returns. Suppose you are thinking how to calculate this tax on it or process to file, here are a few things that you need to know:

Trading or Investment

Bitcoin tax varies based on the holding. First step is seeing if you are trading or holding this as the investment. Suppose it is one kind of investment, then you need to pay the capital gains tax. Suppose you’re trading in the bitcoins, it’s the business income. Thus, if your turnover goes above 2 crore INR, you’re liable for the tax audit. Income tax department in India hasn’t specified any classification for investment and trading. You need to consider several factors like frequency of transaction, duration, time spent on this as well as intention of transaction. This can determine if it is the investment or the business income for the person dealing in Bitcoin.