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Crypto currency and tax challenges that come with it
Most tax regulating authorities consider bitcoins as an illegal way to launder money. Supreme Court too, has discouraged people from using the same time and again. Not only India, countries like USA and China too have banned the use of bitcoins.
But if you do not know what crypto currency is, fret not. Here is all that you need to know about Crypto currency and taxes!
Crypto currency - What is it?
The currency goes by its name, and uses encrypted codes to make a transaction. These codes are well identified by certain user portals. In these recognized portals, people use crypto currency rather than using paper money. An online book keeping record is maintained where in the user account is debited or credited.
How do you do transactions on Crypto currency?
When a user begins a transaction, the computer sends out a single that allow the other person to receive a currency. If the transaction is accepted by the user, the transaction is completed.
Bitcoin is one of the most popular forms of crypto currency being used as of now. These can be used easily on mobiles too, making them largely popular. The receiver merely has to scan the QR code from smartphone and perform the transactions. Transacting through Bitcoins is simple and as quick as using a PayTM wallet or Google Pay. These are also accepted all across the globe and are secure, making them a favourite of users. Another reason for their popularity is the fact that they are not controlled by Central Bank. This ensures there is no inflationary pressure on crypto currency, unlike currency notes.
How Crypto currency makes money laundering possible?
Since it is not controlled by banks or tax authorities, the transactions are not directed to a person. Hence, there is no legal way to find out if the person has obtained the value legally.
Indian Law and its take on Crypto Currency?
Crypto Currency is considered as a software and hence, comes under the Sale of Goods Act 1930. Since it is considered to be a good, it is privy to indirect taxes. GST is also applicable on its sale.
Read more info about the income tax return filing in Delhi http://manishanilgupta.com/
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