CoinTracker, the leading provider of portfolio and tax reporting services in the cryptocurrency market, announced today that it has expanded its services to India. This expansion comes on the heels of the Indian government’s efforts to rein in crypto trading and tax evasion. The recent passage of an amendment to India’s Income Tax Act requires all crypto exchanges operating in India to provide tax information of their customers to the Indian government . Failing to do so will result in fines and criminal prosecution against both the exchange and its management team. What Every Crypto Investor Needs to Know About Tax Compliance in India
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Tracking crypto gains
Have you ever heard of Karatecoin? Neither had we. But, it soared 830% and hit a high of US$37.21 per coin before plunging 83%. And that’s just one example of how volatile cryptocurrencies can be. It’s not always easy to know when or if you have to pay taxes on these transactions. That’s why CoinTracker has launched its services in India so investors can track their crypto gains without any hassle—and without breaking a sweat about tax regulations.
It’s important to record your trading profits accurately. In many countries, any kind of cryptocurrency transaction is a taxable event, so it’s worth finding out whether you need to pay taxes on your cryptocurrency transactions and how you can do that.
The easiest way is by keeping a trading journal. If you don’t use CoinTracker already, you can download their app and track your trading history, which makes filing your taxes even easier—they let you scan a QR code from within their app so that it automatically imports all of your trades into your tax filing form. Note: CoinTracker doesn’t work in Australia yet! You can also look up each purchase on CoinMarketCap and manually enter each one into whatever tax form or spreadsheet tool you use for filing taxes.
Holding crypto on exchanges impacts taxes
So, you’ve invested in cryptocurrency but how do you deal with all your tax and accounting needs? Unfortunately, many investors either don’t even know they have a tax reporting requirement or think they can avoid reporting since their gains are less than $20,000. These investors should take note of three things: (1) trading crypto-to-crypto is a taxable event; (2) there is an IRS Form 8949 that must be filled out for every crypto trade; and (3) taxes will generally apply on a short term capital gain basis.
Bitcoin mining is taxed, but not altcoin mining
Is it time for you to start selling your mined altcoins? If you live in a country that taxes Bitcoin, then you may want to hold off until tax season rolls around. That’s because Bitcoins are considered property rather than a currency, and are thus subject to capital gains tax (CGT). While there is no official classification for cryptocurrency mining, courts generally consider income from mining a non-currency asset—like gold or oil—as CGT.
If you are an employee, your employer probably already handles taxes for you
from withholdings from your paycheck and filing 1099s at year-end, to quarterly estimates and filings. However, if you are a business owner, things get more complicated. This is especially true for crypto investors who want (or need) to pay their taxes at year-end but aren’t sure how. This post will provide some clarity on tax compliance for crypto investors living in or relocating to India. We’ll cover
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When filing your taxes, you’ll need to keep track of how much crypto you’ve owned over the course of a year. The tax liability or benefit associated with any virtual currency transaction is determined by first converting virtual currency into U.S. dollars (or other real currency which may be used as legal tender) based on a spot price on an approved virtual currency exchange such as Coinbase, Coinsecure, Bitstamp, etc., or a similar authorized dealer at any time during that taxable year. Then you determine your cost basis and holding period for those coins and their proceeds.
Don’t forget about Deductions!
If you’re spending time on our site, you probably have some skin in cryptocurrency game. This means that you’ve already taken advantage of one of cryptocurrency’s best features: gains are largely tax-free! Unlike traditional investments, long-term capital gains from cryptocurrencies are only taxed if they bring an investment above $19,000 (that number goes up as your income increases). So make sure you report those losses and deduct them from your taxable income each year!