Invested your precious time researching which Crypto to purchase, where to get it from, and spent your Rupees in a potentially prosperous investment? With the currently volatile-appearing market environment in India for Cryptocurrencies, you may be unsure about what the Government expects from you. Aside from a dedicated article to this linked below, this quick (and auto-updated) guide by Cashify covers all you need to know about How to report Crypto in your Tax, in India!
Related Read: India Crypto Bill Explained: Pay Attention To These Bits
Let’s begin!
Current Status: Legality
India’s approach towards cryptocurrencies is ‘very cautious’. A sizable population has already invested in Cryptos. Thus, the regulators are taking every measure to ensure that Investors don’t lose their Crypto-Invested money.
From a proposed Ban and penalty, the consensus now seems to be that crypto will exist as an asset class rather than an outright currency. This means people may continue to invest and grow their wealth via Cryptos, within delicate boundaries.
Cryptocurrency production will be scarce, and only a select few will likely survive the Government’s discretion. As of now, anyone with a working internet connection can make a crypto coin, leaving endless room for fraud. The regulations may likely make sure that only those who fulfil certain criteria are suitable to produce crypto.
As of today, it seems that Crypto won’t become legal tender co-existing with the Rupee. In other words, you can’t use Bitcoin to go shopping directly.
One question that remains is that who will regulate cryptocurrencies? The Reserve Bank of India (RBI) is the most obvious answer. However, the institution has expressed intentions of introducing its own Crypto. The other possible candidate may be SEBI.
It will also not come as a surprise if the government legislates or ordinances a new body altogether for regulating Crypto.
Current Tax Recognition of Crypto
Crypto is in a bare-bones state in India as of 2021. Thus, there is a lot of confusion about the terminology used to state income made from Crypto profits.
The Government of India currently recognises Cryptocurrency as ‘Property’, and Capital Gains since it generates and changes in value. Another reason for this is that there is a specific number of Cryptos in circulation at any time. This prompted its classification as an Asset Class.
Other Relevant Information on Crypto in India
Cashify has published a series of value-laden articles on CryptoCurrencies and Alt Coins in India. This comes in the wake of the recent Bill. Here are two more:
- What Is Private Cryptocurrency? Is it Going To Be Banned In India?
- NFT Explained: What Is It And Should You Buy It?
That’s all we know so far about how to report crypto in tax, in India! Bookmark this article and stay tuned for what developments unfold!
Related Read: Cashify And The Circular Economy in India
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