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bitcoin trading income

27 December 2018

One of my client doing trading in Bitcoin around 60 lac rs in last year any one suggest me how to file his itr and is it applicable gst Or not and what will be business code???

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8 Replies

Mehul Bhanushali (CA in Practice) (174 Points)
Replied 27 December 2018

I guess this might help you. https://www.google.com/amp/s/qz.com/india/1348885/a-guide-to-paying-taxes-on-cryptocurrency-investments-in-india/amp/

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vinod kumawat ( CS) (425 Points)
Replied 27 December 2018

gst applicable on Bitcoin trading or not??

Mehul Bhanushali (CA in Practice) (174 Points)
Replied 27 December 2018

I guess No because Securities are specifically excluded from the purview of GST and Bitcoin being a capital asset and being in the nature of securities GST won't be applicable on trading of Bitcoin. But still expert views are welcomed.

vinod kumawat ( CS) (425 Points)
Replied 27 December 2018

I just completely confused that gst applicable or not and can I file itr under sec. 44ad or not??

Mehul Bhanushali (CA in Practice) (174 Points)
Replied 27 December 2018

Bitcoin will be treated as capital asset and Income will be taxed under the Head income from capital gains and therefore you cannot file your return u/s 44AD

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vinod kumawat ( CS) (425 Points)
Replied 27 December 2018

but if we trading like trader than it will be consider business income.

Sachin C (Tax Consultant) (107 Points)
Replied 30 December 2018

Taxation of Bitcoin would depend on whether your client is a Miner, Investor or a Trader. In case if he is a Miner or Trader who treats it as stock in trade, it would be treated as Business or Profession Income. Further in case he is an Investor it would taxed as capital gain,but for it to be taxed as capital gain it is not included in the Capital Asset Definition U/S 2(14) of the Income Tax Act 1961.

Coming to the GST part of it, the Any sale, trade, barter or Exchange of Goods/Service's carried out for a consideration in course or furthereance of business would constitute supply. Here again the definitions of Goods/ services have to be interpreted where even services in exchange of currencies are chargeable. But furthermore Bitcoins/Crypto Currency is not a legal tender/Currency as per RBI. To be on safer side it is better to pay both Income Tax and GST on the same.

Thanks

Sachin C