How to pay income tax for bitcoins earned?

nicole7852

full member

Activity: 128

Merit: 100

Quote from: laserwolf on September 12, 2015, 05:48:03 AM

Quote from: polynesia on September 08, 2015, 07:55:20 PM

Quote from: laserwolf on September 08, 2015, 01:54:02 AM

On a related note, do you have to declare your bitcoin holdings in Schedule FA (Foreign Assets Declaration)?
According to a recent FAQ from IT dept, e-wallets need to be declared.

This is something I was not aware of. Do you have some link on this?
I would argue that my bitcoins are held in India, and are not exactly foreign assets. Grin

http://www.incometaxindia.gov.in/communications/circular/circular15_2015.pdf
please refer to pages 11-12

these r just rules on paper ...

and this dosent explains the bullshit u have to deal ...

laserwolf

newbie

Activity: 54

Merit: 0

Quote from: polynesia on September 08, 2015, 07:55:20 PM

Quote from: laserwolf on September 08, 2015, 01:54:02 AM

On a related note, do you have to declare your bitcoin holdings in Schedule FA (Foreign Assets Declaration)?
According to a recent FAQ from IT dept, e-wallets need to be declared.

This is something I was not aware of. Do you have some link on this?
I would argue that my bitcoins are held in India, and are not exactly foreign assets. Grin

http://www.incometaxindia.gov.in/communications/circular/circular15_2015.pdf
please refer to pages 11-12

nicole7852

full member

Activity: 128

Merit: 100

Quote from: newtocryptocurrency on September 11, 2015, 09:07:05 AM

Quote from: nicole7852 on September 10, 2015, 03:46:47 PM

Quote from: newtocryptocurrency on September 09, 2015, 12:06:46 PM

Quote from: dashingriddler on September 09, 2015, 07:18:30 AM

Quote from: newtocryptocurrency on September 06, 2015, 06:30:48 AM

if someone earns 5 bitcoins (at 20,000) from doing some work and converts only 1 bitcoin (at 21000) thru an exchange, how should the income tax be calculated here?

even though in this example it doesn't exceed 2.5 laks but assume that there are other sources of income that make it exceed 2.5 laks..

thank you

From my knowledge, you would be paying the taxes for 1000 INR which is the profit from selling 1 bitcoin for 21000 that you purchased at 20000 INR.

not purchased, but got from doing work for someone.

dude that is the concept of BITCOIN ... NO TAXES , NO govt.. NO banks... and eventually NO QUESTION...
the only good thing for everyone not only Indians is to wait for more places to accept BITCOINS...
and as u r saying ,no the income -tax department wont interfere unless u have continuous trades and that too majority over 10 lacks ..
so no worries u can sell and encash small amounts.

I don't think this is true. Paying taxes is a must even with bitcoins.

I don't anyone in India has traded 10 lacs of Bitcoins that too multiple times.

yes this just what u think... there r people who trade more than that for cash..

yes BITCOIN saves tax and dosent allows govt.. to scam people.

newtocryptocurrency

newbie

Activity: 30

Merit: 0

Quote from: nicole7852 on September 10, 2015, 03:46:47 PM

Quote from: newtocryptocurrency on September 09, 2015, 12:06:46 PM

Quote from: dashingriddler on September 09, 2015, 07:18:30 AM

Quote from: newtocryptocurrency on September 06, 2015, 06:30:48 AM

if someone earns 5 bitcoins (at 20,000) from doing some work and converts only 1 bitcoin (at 21000) thru an exchange, how should the income tax be calculated here?

even though in this example it doesn't exceed 2.5 laks but assume that there are other sources of income that make it exceed 2.5 laks..

thank you

From my knowledge, you would be paying the taxes for 1000 INR which is the profit from selling 1 bitcoin for 21000 that you purchased at 20000 INR.

not purchased, but got from doing work for someone.

dude that is the concept of BITCOIN ... NO TAXES , NO govt.. NO banks... and eventually NO QUESTION...
the only good thing for everyone not only Indians is to wait for more places to accept BITCOINS...
and as u r saying ,no the income -tax department wont interfere unless u have continuous trades and that too majority over 10 lacks ..
so no worries u can sell and encash small amounts.

I don't think this is true. Paying taxes is a must even with bitcoins.

I don't anyone in India has traded 10 lacs of Bitcoins that too multiple times.

nicole7852

full member

Activity: 128

Merit: 100

Quote from: newtocryptocurrency on September 09, 2015, 12:06:46 PM

Quote from: dashingriddler on September 09, 2015, 07:18:30 AM

Quote from: newtocryptocurrency on September 06, 2015, 06:30:48 AM

if someone earns 5 bitcoins (at 20,000) from doing some work and converts only 1 bitcoin (at 21000) thru an exchange, how should the income tax be calculated here?

even though in this example it doesn't exceed 2.5 laks but assume that there are other sources of income that make it exceed 2.5 laks..

thank you

From my knowledge, you would be paying the taxes for 1000 INR which is the profit from selling 1 bitcoin for 21000 that you purchased at 20000 INR.

not purchased, but got from doing work for someone.

dude that is the concept of BITCOIN ... NO TAXES , NO govt.. NO banks... and eventually NO QUESTION...
the only good thing for everyone not only Indians is to wait for more places to accept BITCOINS...
and as u r saying ,no the income -tax department wont interfere unless u have continuous trades and that too majority over 10 lacks ..
so no worries u can sell and encash small amounts.

newtocryptocurrency

newbie

Activity: 30

Merit: 0

Quote from: dashingriddler on September 09, 2015, 07:18:30 AM

Quote from: newtocryptocurrency on September 06, 2015, 06:30:48 AM

if someone earns 5 bitcoins (at 20,000) from doing some work and converts only 1 bitcoin (at 21000) thru an exchange, how should the income tax be calculated here?

even though in this example it doesn't exceed 2.5 laks but assume that there are other sources of income that make it exceed 2.5 laks..

thank you

From my knowledge, you would be paying the taxes for 1000 INR which is the profit from selling 1 bitcoin for 21000 that you purchased at 20000 INR.

not purchased, but got from doing work for someone.

dashingriddler

legendary

Activity: 1258

Merit: 1001

Quote from: newtocryptocurrency on September 06, 2015, 06:30:48 AM

if someone earns 5 bitcoins (at 20,000) from doing some work and converts only 1 bitcoin (at 21000) thru an exchange, how should the income tax be calculated here?

even though in this example it doesn't exceed 2.5 laks but assume that there are other sources of income that make it exceed 2.5 laks..

thank you

From my knowledge, you would be paying the taxes for 1000 INR which is the profit from selling 1 bitcoin for 21000 that you purchased at 20000 INR.

pavan@hosur

sr. member

Activity: 499

Merit: 250

i want to pay compulsory tax? how much tax per 1 lac rs ?

polynesia

legendary

Activity: 1358

Merit: 1000

Quote from: laserwolf on September 08, 2015, 01:54:02 AM

On a related note, do you have to declare your bitcoin holdings in Schedule FA (Foreign Assets Declaration)?
According to a recent FAQ from IT dept, e-wallets need to be declared.

This is something I was not aware of. Do you have some link on this?
I would argue that my bitcoins are held in India, and are not exactly foreign assets. Grin

newtocryptocurrency

newbie

Activity: 30

Merit: 0

Quote from: polynesia on September 08, 2015, 09:27:41 AM

Quote from: newtocryptocurrency on September 06, 2015, 10:55:54 AM

But the thing here is that your passbook would show that you have "spent" 1 lakh as expenditure on something (buying bitcoin). But in the situation I explain, there is no INR involved for those 4 bitcoin. But tax is being paid.

The blockchain is your passbook.

Plus, if you had received your payment in cash, there would have been no trace.

so if there is an audit, the IT people will have to be explained about how Bitcoin works, etc. ?

You are right about cash. so how do IT people ever check for overpaid tax / declared cash?

polynesia

legendary

Activity: 1358

Merit: 1000

Quote from: newtocryptocurrency on September 06, 2015, 10:55:54 AM

But the thing here is that your passbook would show that you have "spent" 1 lakh as expenditure on something (buying bitcoin). But in the situation I explain, there is no INR involved for those 4 bitcoin. But tax is being paid.

The blockchain is your passbook.

Plus, if you had received your payment in cash, there would have been no trace.

laserwolf

newbie

Activity: 54

Merit: 0

On a related note, do you have to declare your bitcoin holdings in Schedule FA (Foreign Assets Declaration)?

According to a recent FAQ from IT dept, e-wallets need to be declared.

newtocryptocurrency

newbie

Activity: 30

Merit: 0

Quote from: polynesia on September 06, 2015, 09:22:07 AM

Quote from: newtocryptocurrency on September 06, 2015, 08:24:41 AM

even if he were to pay tax on all 5 bitcoins at the price they were purchased and then capital gains tax on the 1 bitcoin he sold, how would he show the department where the money equivalent to the 5 bitcoins are? he has not sold some of them and so they are not in his bank account. Won't they ask him about it?

That is correct - tax on income from other sources (on the 5 bitcoins) and capital gains (on the 1 sold).
The IT department won't ask you where the money is. Even if they do, you have bitcoins to show for it.

How exactly does one show bitcoins? has anyone here got audited for this purpose? I don't even think any IT person would know about Bitcoin.

Is there an analogy to a non-bitcoin scenario in what I am trying to explain?

Quote

Theoretically, you could have earned 1 lakh and bought 5 bitcoins. This is no different.

But the thing here is that your passbook would show that you have "spent" 1 lakh as expenditure on something (buying bitcoin). But in the situation I explain, there is no INR involved for those 4 bitcoin. But tax is being paid.

sky_g

full member

Activity: 167

Merit: 100

Quote from: polynesia on September 06, 2015, 09:22:07 AM

Quote from: newtocryptocurrency on September 06, 2015, 08:24:41 AM

even if he were to pay tax on all 5 bitcoins at the price they were purchased and then capital gains tax on the 1 bitcoin he sold, how would he show the department where the money equivalent to the 5 bitcoins are? he has not sold some of them and so they are not in his bank account. Won't they ask him about it?

That is correct - tax on income from other sources (on the 5 bitcoins) and capital gains (on the 1 sold).
The IT department won't ask you where the money is. Even if they do, you have bitcoins to show for it.

Theoretically, you could have earned 1 lakh and bought 5 bitcoins. This is no different.

Ha ha ha ....With Indian Tax authority they cant even track Indian Rupess. Possibly 90% tax man do not know what is Bitcoin and even if they know they can't do anything as they are too lazy as they will not gain anything from it.

polynesia

legendary

Activity: 1358

Merit: 1000

Quote from: newtocryptocurrency on September 06, 2015, 08:24:41 AM

even if he were to pay tax on all 5 bitcoins at the price they were purchased and then capital gains tax on the 1 bitcoin he sold, how would he show the department where the money equivalent to the 5 bitcoins are? he has not sold some of them and so they are not in his bank account. Won't they ask him about it?

That is correct - tax on income from other sources (on the 5 bitcoins) and capital gains (on the 1 sold).
The IT department won't ask you where the money is. Even if they do, you have bitcoins to show for it.

Theoretically, you could have earned 1 lakh and bought 5 bitcoins. This is no different.

newtocryptocurrency

newbie

Activity: 30

Merit: 0

even if he were to pay tax on all 5 bitcoins at the price they were purchased and then capital gains tax on the 1 bitcoin he sold, how would he show the department where the money equivalent to the 5 bitcoins are? he has not sold some of them and so they are not in his bank account. Won't they ask him about it?

newtocryptocurrency

newbie

Activity: 30

Merit: 0

if someone earns 5 bitcoins (at 20,000) from doing some work and converts only 1 bitcoin (at 21000) thru an exchange, how should the income tax be calculated here?

even though in this example it doesn't exceed 2.5 laks but assume that there are other sources of income that make it exceed 2.5 laks..

thank you

Topic: How to pay income tax for bitcoins earned? (Read 2426 times)