You have pretty well highlighted the issue, but I think the concerns have not at all changed even after the ban of exchanges in India despite of one thing that you just have to scrutinize your banks statements to find out which receipts are from bitcoin selling.
Let me explain, If you have filed the return last year in 44ADA with showcasing your receipts being professional in nature without an issue of invoice the same can still be done. Moreover the fact the GST registration limit too has been raised to 40 lakhs gives you a large enough window for not issuing an Invoice. Most of the freelancers hardly issue any kind of invoices to their clients. Moreover as bitcoin has no legal statue as to what it is whether a commodity, currency or medium of exchange we can use it as anything. So you still have two options available.
1. Show it as a business income and professional receipts if you are earning bitcoin from signature campaigns or some work. Don't forget to claim for som expenses as a reduction.
2. If the receipts are larger than 40 Lakhs then it's better to take up a GST number. issuing invoice is never a problem and with an income of around 40 Lakhs an accounting software won't hurt that much.
I have sometimes sold BTC for INR face to face. In these days, I was not too much familiar with all the available ways of trading btc.
In case someone is doing face to face deal, I don't think there's any payable taxes since no bill is there.
In most cases, I didn't hold bitcoin for long term. Can I count it as Capital gain too, I'm not much expert on these stuff. Is there any limit which will not be counted as capital gain even if I have gained a little profit?
As per law a capital asset is a property of any kind whether for business or not. So you can regard bitcoin as your property thus a capital asset. If you have made a little profit better show its Sale Amount - Purchase Consideration = Profit . Pay Tax at this profit in form of Short term Capital Gain to stay on the safer side. Webtricks very well highlighted the slabs for it
Make sure to accept the proceed of your crypto sales at a current account. Keep note of all the transactions. Pay tax as per presumptive taxation rules.
I did file my return under 44ADA as presumptive taxation last year because it was possible to trail back the source of income via Zebpay account. I can easily differentiate my crypto receipts from other receipts because they were credited from Zebpay account. But this year, receipts have come from personal accounts of buyers because I sold on P2P exchanges. Hence, it is almost impossible to differentiate which are actually crypto receipts and which are not. In such circumstances, I have no evidence to trail back transaction to my crypto earnings. Income Tax Department will surely not believe my return on mere words.
Tracing back transactions is not that difficult trust me. You just need to get your annualized bank statement which does mentions the name of the sender that will make it much easier for you to trace whether it's an income or merely a casual receipt. Even if you are unable to do so using this method try to get a statement from the P2P methods that you have used as far as I know wazirx, bitbns, koinex loop, remitano all provide with such statements. Even if you are unable to trace out transaction due to huge volume of transactions including the personal ones(which I don't think might happen with a saving account). Better just make a rough estimate of how much earnings you might have received from Crypto such as a percentage of total receipts. Every statement has total Receipts columns just apply a roughly calculated percentage make sure to be on the upper side to be safe. This would be the best solution with zero problems.
Moreover, If you have high volume of transactions, I would recommend you make a separate saving/ current account for your crypto related receipts from this year making it way easier to trace out such transactions just like normal businesses do. You will save yourself a lot of headache.