Karan Talwar
The last day to file an Income tax return 2019-20 is on 10th January 2020, but still many are facing problems regarding bitcoin and ITR, hope this article helps.
From RBI and GST to the Income Tax Department, the scope of all-around monitoring of Bitcoin has been increasing. If someone has invested in bitcoin, then profit by it will be classified under business income. A warning was issued for the same by the ITR department. Earning by Bitcoin will now be treated as business income and will be taxed.
As there are a lot of reports that allegedly huge amount of black money is being used in Bitcoin, a Directorate General of GST Intelligence proposed to impose Goods and Services Tax on one end and the other end it is made necessary to mention this in their Income Tax Return from 2019-2020 onwards. This information has to be provided under ITR-2 and ITR-3. If one tried to ignore or hide information asked, one will be facing direct action from the department.
As per new norms by the Income Tax Department profits earned by cryptocurrency will now be classified under capital gains or business income. If you have bitcoins and income is more than Rs 50 lakh then in ITR you have to mention it on the property round, it has to be shown as capital gain whenever the bitcoin is bought or sold.
A separate tax will be imposed on making bitcoin and separate tax on its purchase there are two categories one is of minor and the other one is of the investor. Bitcoin capital gains from mining will not be taxed. If you have purchased money by paying bitcoin, then there will be a tax on the difference between the price of buying and selling. This will also be considered income only.
