INSUBCONTINENT EXCLUSIVE:
Crypto financiers are now unsure how they need to file their ITR in absence of a clear guidelineThe federal government just recently
extended the deadline for filing tax return for the fiscal year 2020-21 to September 30
According to the Income Tax Act, a person, who has an annual earnings of more than Rs 2.5 lakh or who has actually received a payment on
which tax was deducted at source, needs to file an ITR, disclosing all incomes
Cryptocurrency financiers are now not sure how they must submit their ITR in absence of a clear guideline to classify incomes from the
virtual currencies.After the Supreme Court lifted RBI's restriction on cryptocurrencies, many Indians started investing in this
speculative market with a goal to make a windfall throughout bull runs of Bitcoin, Dogecoin and others in the recent past
Some of them need to have made handsomely, however how these earnings can be revealed is now becoming a job for them.According to Area 2(
14) of the Income-Tax Act, 1961, a capital possession is any type of residential or commercial property held by a person, whether linked to
his company or occupation
Taxation professionals think, gains from cryptocurrencies too are taxable.If they are, then these gains can be classified as either capital
gains or company earnings
This classification will choose which income tax return form an assessee should file and how much tax will be imposed on the earnings
Earnings from cryptocurrencies can likewise be highlighted under 'Income from Other Sources' while filing the ITR.The computation of tax
levied on cryptocurrencies will take into consideration the duration of holding
If investors hold cryptocurrencies for 36 months or more, the gains could be taxable as long-term capital gains, and less than 36 months, it
would be short-term capital gains.Short-term capital gains are taxable according to the slab rates suitable to a taxpayer, but long-term
capital gains are taxed at a flat rate of 20 percent
For individuals who have capital gains or business earnings from cryptocurrencies, ITR-2 and ITR-3 must be the pertinent kinds for
submitting tax returns.However, a lack of explanation on crypto tax might lead to disputes and it's much better to consult your tax
consultant prior to you reveal your crypto incomes on ITR types.
