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Inward remittance in itr

shreeprasad M (0 Points)

03 January 2025

I had deposited some btc in coinbase in 2019. Coinbase left india and they took my btc. They sold it and converted to usd and gave to usa claim department. Now when iam claiming back the us govt wiring money to me under P1099 purpose code. Under which section i have to show this. Please help

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (5818 Points)
Replied 03 January 2025

I'll guide you through the tax implications of receiving funds from the US government related to your Bitcoin (BTC) deposit.

Tax Implications in India The income you receive from the US government is considered foreign income and is subject to tax in India.

*Section to Report the Income* You'll need to report this income under the following sections:

1. *Section 5*: This section deals with the scope of total income, which includes income from all sources, including foreign sources.

2. *Section 56*: This section deals with income from other sources, which includes income that doesn't fit into other categories, such as interest, dividends, or capital gains.

*Tax Treatment* The tax treatment of this income depends on the nature of the income:

1. *Capital Gains*: If the BTC was sold by Coinbase and the proceeds were converted to USD, you may have capital gains tax implications. You'll need to calculate the capital gains and report them under Section 45 of the Income-tax Act, 1961.

2. *Other Income*: If the income is not capital gains, you'll report it under Section 56 as income from other sources.

*Tax Rates* The tax rates applicable to this income will depend on your income tax slab rate.

*Compliance* Ensure you: 1. *Report the income*: In your income tax return (ITR) for the relevant financial year.

2. *Pay taxes*: Pay taxes on the income received, if applicable.

3. *Maintain documentation*: Keep records of the income received, including the P1099 form and any other relevant documents. Consult a tax professional to ensure accurate reporting and compliance with Indian tax laws.

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