Cryptocurrencies tax treatment

Hi

1. Use FIFO

2. Capital Gains are levied as soon as an asset is sold. So, tax has to be paid in year of sale and not in year of transfer to bank account.

1) FIFO

2) Capital gain will be levied irrespective of the money transfer to the bank.

Thanks

Dear Sir,

Please find below answers :

a) its FIFO only.

b) it will be subject to capital gain irrespective of fact that whether fund is transferred to bank or not

Hi,

1. It's FIFO method.

2. Capital gain is applicable on sale of cryptocurrencies. It is nothing to do with bank account transfer.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

1. Yes, STCG can be set off against STCL. If there's any excess loss, it can be carried forward for future set offs.

2. Yes, it would be considered as sale.

Hi,

Yes, you can adjust short term capital gain with short term capital loss in the same year. You can also carry forward the remaining loss.

Yes, exchange of cryptos will be termed as sale.

It depends upon your residential status. If you are resident in India then it will be covered under Income tax laws.

Thanks

If the transactions have been done in an Indian resident's name, it will be chargeable to tax in India.

Its always fifo sir.

Further tax on capital gain does not work with where the gain is received. I mean to say whether it is in bank account of Demate of Exchange account, if capital gain arises it arises though you have not withdrawn amount to your bank account.

You can always purchase new assets from proceeding of sale, but it does not make any difference to calculation of capital gain.

Yes , Short term capital loss can be set off against short term capital gain. Further you can also carried forward un absorbed capital loss to next 8 years.

The other question you have asked can be considered as transaction under barter system and for that some more clarification is required.

If you are resident of india your global income is taxable in india as per secton 9 of the income tax act 1961.

Hi

Technically global income of an Indian resident is taxable in India. Accordingly, even if the trading has taken place outside India, it will be taxable in India subject to the DTAA between India and that country.

Hi

FIFO methodology needs to be used and capital gains are not dependent on whether the funds are transferred to bank account or not.

It becomes applicaple at the point of sale.

Regards,

Nikhil

To your second question - yes, STCG can be adjusted with STCL and you will need to pay taxes only on the net amount.

Even if the profits are earned outside India, you will be liable to pay taxes in India if your residential status is Resident in India.

Hello,

I assume that your earlier query has been resolved and hence only answering the last one.

Yes, it will be taxed in India, Since you are resident in India your entire global income will be taxed in India.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP

Hi,

Since you are an Indian resident as per the Indian Income Tax Act, your entire global income shall be subject to tax in India.

Regards,

Keerthiga Padmanabhan

M.Com., CA, LL.B