Tax Filing & Crypto Taxation
Tax filing is one of the important parts and we must do it without fail. I make sure that I do it before the due date without fail as I don't want to get into some trouble for no reason and I don't find it worthy if I get any notice from the income tax department. In India usually, the last date for tax filing is 31 July which they generally extend by a month and make it 31st August. This is a standard practice that has been going on for many years. At least since when I am doing filing but I used to in the month of July and rarely waited for extension announcement.
For the last 2 years because of covid govt is quite liberal and they keep on extending the deadline a lot so that people get more time and can do it easily. Last year it was 31 Dec and this year again it has been pushed to 31 Dec. Earlier it was move dot 31 Aug and then 30th September but now in mid of sep month, they announced the extension for 31 Dec 2021.
This extension is because they have upgraded their online filing portal this year and to make people understand they have given the extension.
Now in India tax on crypto is one the case where lots of confusion can be seen. Some people think that since there is no regulation in the country so there would no requirement to pay tax but this is not right. As per the income tax rule, any income that we earn is part of it and despite going through the source of income it falls under the tax category and tax must be paid.
The government plans to compartmentalize virtual currencies and their tax based on their use, be it investments, payments, or utility.
Indian govt is all set to bring the bill to the table in parliament and this will also enable to have tax rules for crypto India but as of now, there should be tax paid as per the existing tax law. There could different slabs and rates after the regulation but as of now with the standard rate, it should not be ignored at all and this will help the crypto community to get regulation early.
The government has already made it mandatory for companies dealing with virtual currencies to disclose profit or loss incurred on transactions. It also asked them to disclose the amount of cryptocurrency they hold in their balance sheets. But this has not yet brought the taxability laws to govern their transactions.
This is already conveyed to all the companies in India to share their crypto holding and its surely part of their further crypto planning in the country. Now when crypto adoption is growing so its very important to bring corporate on the same page before individuals.
Taxation is payable once we make the profit and there are ways that are considered as income by crypto-
- Mining
- Income by Trading
- Transferred in exchange for real currency
- Received on sale of goods and services
Above are the ways that are considered as income in the crypto space and if these are followed then its part of income through crypto.
I will finish my tax filing in October month most probably and won't wait for Dec end for sure. I am missing some documentation and once I get that then I get this done. Taxation is something that most people don't like and I am not the exception. Being a salaried guy everything is already shared with govt by my employer so applicable tax is already deducted and only I need to do the official filing with some additions.
Thank you.
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