Crypto Taxation in India
Now that crypto buy and sell through bank account is allowed in India since March 2020 so the next question is about taxation. Since govt has allowed crypto trading so people are surely making some profits but there is no clarity about the tax filing for the earning from crypto. The last financial year in India was ended on 31 March 2020 and it ha has also got 1 month time which was full-on baking bases crypto trading solutions.
Tax filing in India starts from May and continues till 31 July every year unless the deadline of 31 July is not extended. This year it might get an extension because of covid-19 and chances are high but there is no such information from the govt side. Exchanges have sent emails to RBI and tax authorities for more clarity of this part so that users can file their taxes as per the norms clarified by the govt. Since all the exchanges in the country are following KYC compliance so they can easily get the transaction data to calculate tax.
There is even no clarity if users can file their taxes (if applicable) as per the standard rules and slabs and if there is any change announced by authorities then, later on, it can be revised. It was shared before that govt is working behind on regulation side so its assumed that they would have a draft for tax treatment already but seem because of COVID-19 lockdown things are delayed. Now since the govt is trying to start their offices slowly so maybe there would be some information about it soon.
India has a different tax structure for short term and long term gain so it would be interesting to see if they put crypto on one side or in both depending upon the period of holding. If they assign both the options then exchanges have to provide the data to users accordingly to calculate but this will only be possible when there are guidelines by the govt in place. IAMAI team is working closely with the Reserve bank of India to get a proper policy framework for a better understanding of crypto in the country.
India has got 1.7 million verified users as per the data provided by exchanges and this number is growing every day after the removal of banking banks in the country. Now since the user base is growing so its very important to have a clear policy in place along with tax arrangement for the same.
I think that as of now users should wait for some time on their filing as they have almost 3 months for tax filing and hopefully soon there would be some clarity on this since exchanges are already on it and working to get more information.
Thank you so much.
