Savings on Cryptocurrencies Taxes in India


Crypto Tax Overview:

In India, cryptocurrencies are not recognized as legal tender. However, the income from crypto transactions is taxable. The Indian tax authorities categorize cryptocurrencies as Virtual Digital Assets (VDAs) or capital assets, depending on the transaction’s nature and the user’s intent.

Taxation Rules for Cryptocurrencies:

Gains from VDAs are taxed at a flat 30%, regardless of the holding period. Only the cost of acquisition is deductible; other expenses like mining costs are not. Losses cannot offset other income or carry forward. A 1% Tax Deducted at Source (TDS) applies to transfers exceeding a certain threshold.

Strategies to Save on Crypto Taxes -

1. Utilize Loss Harvesting:

Loss harvesting involves selling cryptocurrencies at a loss to offset gains. This can reduce taxable income, especially in a volatile market. However, beware of the “wash sale” rule, which may apply even if not explicitly stated for crypto.

2. Invest in Bitcoin ETFs:

Investing in Bitcoin ETFs might offer different tax benefits than holding Bitcoin directly. ETFs are usually considered securities, which could result in more favorable tax treatment depending on the tax rules for securities.

3. Use Tax-Advantaged Accounts:

While not widely available in India, future regulations might allow crypto investments in retirement accounts like EPF or NPS, potentially offering tax-free growth or tax deferral.

4. Take Advantage of Deductions:

Trading fees, transaction costs, and interest expenses from loans for investing in crypto can potentially be deducted, reducing taxable income.

5. Gift Cryptocurrencies:

Gifting crypto can reduce taxable estates. In India, gifts are generally taxed unless received from relatives or on special occasions. The recipient might not pay immediate taxes but will be taxed on gains if they sell the crypto later.

6. Charitable Contributions:

Donating crypto to recognized charities can offer tax deductions based on the fair market value at the donation time, thus reducing taxable income.

7. Use Crypto Tax Software:

Crypto tax software can help track transactions, calculate gains and losses, and produce accurate tax reports, ensuring compliance and optimal tax savings.

8. Keep Meticulous Records:

Accurate records of every crypto transaction, including dates, amounts, and fees, are essential for tax reporting. This helps in calculating precise gains and losses.

9. Consider Self-Directed IRAs:

A Self-Directed IRA allows broader asset investment, including crypto. Traditional SDIRAs offer tax-deductible contributions and tax-deferred gains. Roth SDIRAs provide tax-free withdrawals, beneficial if future tax rates rise.

10. Consult a Tax Professional:

A tax expert knowledgeable in cryptocurrency regulations can provide personalized advice, navigate complex tax laws, and optimize tax outcomes.

Avoiding Common Tax Pitfalls

Reporting All Transactions

Every crypto transaction, including trades and purchases, should be reported.

Understanding Tax Rules

Know the local tax regulations for crypto transactions to avoid surprises, such as thinking only fiat conversions are taxable.

Tracking Deductible Expenses

Keep detailed records of all deductible expenses, like transaction fees, to reduce taxable gains.

Using Losses Strategically

Sell underperforming assets to offset gains, adhering to applicable wash sale rules.

Accurate Record Keeping

Maintain complete records to ensure accurate tax filings and avoid penalties.

Regional Tax Differences

Different regions have varying tax laws. Consult professionals familiar with the relevant jurisdictions.

Correctly Calculating Taxable Amounts

Include all costs in the cost basis to accurately calculate gains or losses.

Know 4 new Exemptions Under New Tax Regime: 2023


In the Union Budget 2023, Finance Minister Nirmala Sitharaman suggested making significant changes to the new tax structure in order to increase adoption. The fiscal year 2023–2024 will see the implementation of these modifications.

A new tax system was unveiled in India’s Union Budget 2020 that offers lower tax rates to those who are willing to give up certain exemptions and deductions. Taxpayers can choose to continue paying under the previous system until the fiscal year 2022–2023. However, on April 1, 2023, the new system will become the default.

Assuming that citizens are prepared to surrender exceptions and derivations like the House Lease Recompense (HRA), Leave Travel Concession (LTC), and others, they can exploit lower charge rates under the new expense framework.

For people with pay up to-

Rs. 3 lakhs: Rs., no tax 3 lakhs and Rs. 6 lakhs: 5% tax

Rs. 6 lakhs and Rs. 9 lakhs: 10% tax

Rs. Rs. 9 lakhs and 12 lakhs: 15% tax

Rs. Rs. 12 lakhs. 15 lakhs: 20% duty

Above Rs. 15 lakhs:

Tax of 30% It’s important to keep in mind that if a taxpayer chooses the new tax system, they won’t be able to use deductions like Section 80C and Section 80D.

Exemptions Under the New Tax System 2023–2024

The tax brackets have been rearranged, and everyone will use the new system by default starting with the next fiscal year. A lower tax rate was part of the new tax structure, but there were no exemptions. The tax-free amount has been raised to 7 lakh rupees.

Standard Deduction

A salaried taxpayer can claim up to Rs 50,000 in standard deduction. Family pensioners are entitled to a yearly standard deduction of Rs 15,000 under the new tax law.

Contributions to your NPS account made by your employer

As a salaried employee, you are entitled to deduct contributions to your NPS account made by your employer from your gross income. This deduction is requested in accordance with Section 80CCD (2) of the Income Tax Act of 1961. Under Section 80CCD(2), a maximum deduction of ten percent of the base salary plus DA is allowed.

Agniveer Corpus Fund

According to the announcement made in the Budget speech, the Agniveer may deduct from income any sum paid or deposited to the Agniveer Corpus Fund in accordance with the newly proposed section 80CCH of the Income-tax Act.

क्‍या है टैक्‍सपेयर्स चार्टर ? आज लॉन्च हुआ प्लेटफॉर्म


प्रधानमंत्री नरेंद्र मोदी ने गुरुवार को ईमानदारी से टैक्‍स चुकाने वालों के लिए एक नया प्‍लेटफॉर्म लॉन्‍च कर दिया है. इसका नाम 'पारदर्शी कराधान-ईमानदार का सम्मान' (ट्रांसपेरेंट टैक्‍सेशन-ऑनरिंग द ऑनेस्‍ट) है. इसका मकसद करदाताओं को सहूलियत देना है. इसके जरिये टैक्‍स अनुपालन को आसान बनाया गया है. वहीं, रिफंड में तेजी लाई जाएगी. इससे ईमानदार करदाताओं को फायदा होगा. यह प्‍लेटफॉर्म प्रत्यक्ष कर सुधारों की यात्रा को और भी आगे ले जाएगा. 

इसके तहत 3 सुविधाएं शुरू की गई हैं. इनमें फेसलेस असेसमेंट , फेसलेस अपील और टैक्सपेयर्स चार्टर शामिल हैं. फेसलेस असेसमेंट और टैक्सपेयर्स चार्टर 13 अगस्‍त से लागू हो गए हैं. जबकि फेसलेस अपील की सुविधा 25 सितंबर से लागू होगी. इस नए सिस्टम के जरिये ईमानदार टैक्सपेयर्स को मजबूत करने की कोशिश की जा रही है. 

टैक्सपेयर चार्टर का मतलब क्या है? 

पीएम मोदी ने टैक्सपेयर चार्टर को देश की विकास यात्रा में एक बड़ा कदम कहा है. वह बोले कि यह टैक्सपेयर के अधिकार और कर्तव्यों को संतुलित करने का कदम है. टैक्सपेयर को इस स्तर का सम्मान और सुरक्षा देने वाले बहुत ही कम गिने चुने देश हैं और अब भारत भी उसमें शामिल हो गया है. टैक्सपेयर की बात पर विश्वास करना होगा. 

उन्‍होंने कहा कि अगर किसी पर शक है तो टैक्सपेयर को अब अपील और समीक्षा का अधिकार दिया गया है. इस चार्टर में टैक्सपेयर से कुछ अपेक्षाएं भी की गई हैं. मोदी बोले कि टैक्स देना और सरकार के लिए टैक्स लेना हक का विषय नहीं, बल्कि ये दोनों की जिम्मेदारी है.


क्‍या हैं टैक्‍सपेयर चार्टर के मुख्‍य उद्देश्‍य:

करदाताओं के साथ उचित व्‍यवहार : 

करदाताओं के साथ टैक्‍स विभाग उचित और स्‍नेह पूर्वक व्‍यवहार करेगा.

 सामान्‍य जन की ईमानदारी पर विश्‍वास: 

इनकम टैक्‍स विभाग सभी करदाताओं पर विश्‍वास करेगी. उन्‍हें ईमानदार के तौर पर देखा जाएगा. 

अपील और समीक्षा की सुविधा: 

टैक्‍स विभाग उचित व पारदर्शी अपील और समीक्षा की व्‍यवस्‍था उपलब्‍ध कराएगा.

सटीक जानकारी मुहैया कराना: 

करदाता टैक्‍स कानूनों का अनुपालन कर सकें, इसके लिए विभाग सटीक जानकारी मुहैया कराएगा. 

समय से फैसले लेना: 

विभाग इनकम टैक्‍स से जुड़े हर मामले में कानून के तहत निर्धारित समय में फैसला लेगा. 

टैक्‍स की सही रकम कलेक्‍ट करना: 

विभाग केवल टैक्‍स के तौर पर बकाया रकम को ही कलेक्‍ट करेगा. 

करदाताओं की गोपनीयता का सम्‍मान करना: 

अगर किसी तरह की पूछताछ, जांच या कार्रवाई की जरूरत पड़ती है तो विभाग इसमें पूरी सतर्कता बरतेगा. डिपार्टमेंट टैक्‍सपेयर की ओर से दी गई जानकारी का खुलासा नहीं करेगा.

अथॉरिटीज की जवाबदेही तय करना: 

विभाग अपने कार्यों के लिए अपनी जवाबदेही तय करेगा. 

शिकायत करने की व्‍यवस्‍था: 

विभाग टैक्‍सपेयर्स को शिकायत करने के लिए व्‍यवस्‍था मुहैया कराएगा. इन शिकायतों का समय से निपटान किया जाएगा. 

न्‍यायपूर्ण व्‍यवस्‍था उपलब्‍ध करना: 

समय रहते टैक्‍स से जुड़े विभिन्‍न मसलों का निपटारा करने के लिए विभाग उचित और पारदर्शी व्‍यवस्‍था मुहैया कराएगा. 

टैक्‍स कम्‍प्‍लायंस की लागत घटाना: 

टैक्‍स से जुड़ी मुकदमेबाजी के मामले में विभाग कम्‍लायंस की लागत को ध्‍यान में रखेगा. 

क्‍या है करदाताओं से उम्‍मीद?

ईमानदार रहें और ईमानदारी से टैक्‍स दें: 

करदाताओं से उम्‍मीद है कि वे सभी जानकारियों का खुलासा करेंगे और अपनी टैक्‍स देनदारी को चुकाएंगे. 

सूचित रहें: 

करदाताओं से अपेक्षा है कि वे अपनी टैक्‍स देनदारियों के प्रति सजग रहें और जरूरत पड़ने पर विभाग से मदद लें. 

सटीक रिकॉर्ड रखें: 

करदाताओं से अपेक्षा है कि वे कानून के अनुसार अपने रिकॉर्डों को ठीक से रखें. 

जानें कि प्रतिनिधि उनकी ओर से क्‍या करते हैं: 

टैक्‍सपेयर्स से उम्‍मीद है कि वे जानें कि उनके अधिकृत प्रतिनिधि क्‍या सूचनाएं दे रहे हैं. 

समय से प्रतिक्रिया दें: 

करदाताओं से अपेक्षा है कि वे समय से अपनी चीजों को जमा करें. 

समय से टैक्‍स भुगतान करें: 

लोगों से समय से अपना टैक्‍स जमा करने की अपेक्षा की गई है.


#CBEC Notification #GST (Second Amendment) Rules, 2018


MINISTRY OF FINANCE

(Department of Revenue)

CENTRAL BOARD OF EXCISE AND CUSTOMS

NOTIFICATION

New Delhi, the 7th March, 2018

No. 12/2018-Central Tax

G.S.R. 204(E).—In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby makes the following rules further to amend the Central Goods and Services Tax Rules, 2017, namely:-

(1) These rules may be called the Central Goods and Services Tax (Second Amendment) Rules, 2018.

(2) Save as otherwise provided in these rules, they shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

2. In the Central Goods and Services Tax Rules, 2017, –

(i) with effect from the date of publication of this notification in the Official Gazette, in rule 117, in sub-rule (4), in clause (b), for sub-clause (iii), the following shall be substituted, namely:-

“(iii) The registered person availing of this scheme and having furnished the details of stock held by him in accordance with the provisions of clause (b) of sub-rule (2), submits a statement in FORM GST TRAN 2 by 31st March 2018, or within such period as extended by the Commissioner, on the recommendations of the Council, for each of the six tax periods during which the scheme is in operation indicating therein, the details of supplies of such goods effected during the tax period;”;

(ii) for rule 138, the following rule shall be substituted, namely:-

“138. Information to be furnished prior to commencement of movement of goods and generation of e-way bill.- (1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees—

(i) in relation to a supply; or

(ii) for reasons other than supply; or

(iii) due to inward supply from an unregistered person,

shall, before commencement of such movement, furnish information relating to the said goods as specified in Part A of FORM GST EWB-01, electronically, on the common portal along with such other information as may be required on the common portal and a unique number will be generated on the said portal:

Provided that the transporter, on an authorization received from the registered person, may furnish information in Part A of FORM GST EWB-01, electronically, on the common portal along with such other information as may be required on the common portal and a unique number will be generated on the said portal:

Provided further that where the goods to be transported are supplied through an e-commerce operator or a courier agency, on an authorization received from the consignor, the information in Part A of FORM GST EWB-01 may be furnished by such e-commerce operator or courier agency and a unique number will be generated on the said portal:

Provided also that where goods are sent by a principal located in one State or Union Territory to a job worker located in any other State or Union Territory, the e-way bill shall be generated either by the principal or the job worker, if registered, irrespective of the value of the consignment:

Provided also that where handicraft goods are transported from one State or Union Territory to another State or Union Territory by a person who has been exempted from the requirement of obtaining registration under clauses (i) and (ii) of section 24, the e-way bill shall be generated by the said person irrespective of the value of the consignment.

Explanation 1.– For the purposes of this rule, the expression “handicraft goods” has the meaning as assigned to it in the Government of India, Ministry of Finance, notification No. 32/2017-Central Tax dated the 15th September, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1158 (E) dated the 15th September, 2017 as amended from time to time.

Explanation 2.- For the purposes of this rule, the consignment value of goods shall be the value, determined in accordance with the provisions of section 15, declared in an invoice, a bill of supply or a delivery challan, as the case may be, issued in respect of the said consignment and also includes the central tax, State or Union Territory tax, integrated tax and cess charged, if any, in the document and shall exclude the value of exempt supply of goods where the invoice is issued in respect of both exempt and taxable supply of goods.

(2) Where the goods are transported by the registered person as a consignor or the recipient of supply as the consignee, whether in his own conveyance or a hired one or a public conveyance, by road, the said person shall generate the e-way bill in FORM GST EWB-01 electronically on the common portal after furnishing information in Part B of FORM GST EWB-01.

(2A) Where the goods are transported by railways or by air or vessel, the e-way bill shall be generated by the registered person, being the supplier or the recipient, who shall, either before or after the commencement of movement, furnish, on the common portal, the information in Part B of FORM GST EWB-01:

Provided that where the goods are transported by railways, the railways shall not deliver the goods unless the eway bill required under these rules is produced at the time of delivery.

(3) Where the e-way bill is not generated under sub-rule (2) and the goods are handed over to a transporter for transportation by road, the registered person shall furnish the information relating to the transporter on the common portal and the e-way bill shall be generated by the transporter on the said portal on the basis of the information furnished by the registered person in Part A of FORM GST EWB-01:

Provided that the registered person or, the transporter may, at his option, generate and carry the e-way bill even if the value of the consignment is less than fifty thousand rupees:

Provided further that where the movement is caused by an unregistered person either in his own conveyance or a hired one or through a transporter, he or the transporter may, at their option, generate the e-way bill in FORM GST EWB-01 on the common portal in the manner specified in this rule:

Provided also that where the goods are transported for a distance of upto fifty kilometers within the State or Union Territory from the place of business of the consignor to the place of business of the transporter for further transportation, the supplier or the recipient, or as the case may be, the transporter may not furnish the details of conveyance in Part B of FORM GST EWB-01.

Explanation 1.– For the purposes of this sub-rule, where the goods are supplied by an unregistered supplier to a recipient who is registered, the movement shall be said to be caused by such recipient if the recipient is known at the time of commencement of the movement of goods.

Explanation 2.- The e-way bill shall not be valid for movement of goods by road unless the information in PartB of FORM GST EWB-01 has been furnished except in the case of movements covered under the third proviso to subrule (3) and the proviso to sub-rule (5).

(4) Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall be made available to the supplier, the recipient and the transporter on the common portal.

(5) Where the goods are transferred from one conveyance to another, the consignor or the recipient, who has provided information in Part A of the FORM GST EWB-01, or the transporter shall, before such transfer and further movement of goods, update the details of conveyance in the e-way bill on the common portal in Part B of FORM GST EWB-01:

Provided that where the goods are transported for a distance of upto fifty kilometers within the State or Union Territory from the place of business of the transporter finally to the place of business of the consignee, the details of the conveyance may not be updated in the e-way bill.

(5A) The consignor or the recipient, who has furnished the information in Part A of FORM GST EWB-01, or the transporter, may assign the e-way bill number to another registered or enrolled transporter for updating the information in Part B of FORM GST EWB-01 for further movement of the consignment:

Provided that after the details of the conveyance have been updated by the transporter in Part B of FORM GST EWB-01, the consignor or recipient, as the case may be, who has furnished the information in Part A of FORM GST EWB-01 shall not be allowed to assign the e-way bill number to another transporter.

(6) After e-way bill has been generated in accordance with the provisions of sub-rule (1), where multiple consignments are intended to be transported in one conveyance, the transporter may indicate the serial number of e-way bills generated in respect of each such consignment electronically on the common portal and a consolidated e-way bill in FORM GST EWB-02 maybe generated by him on the said common portal prior to the movement of goods.

(7) Where the consignor or the consignee has not generated the e-way bill in FORM GST EWB-01 and the aggregate of the consignment value of goods carried in the conveyance is more than fifty thousand rupees, the transporter, except in case of transportation of goods by railways, air and vessel, shall, in respect of inter-State supply, generate the e-way bill in FORM GST EWB-01 on the basis of invoice or bill of supply or delivery challan, as the case may be, and may also generate a consolidated e-way bill in FORM GST EWB-02 on the common portal prior to the movement of goods:

Provided that where the goods to be transported are supplied through an e-commerce operator or a courier agency, the information in Part A of FORM GST EWB-01 may be furnished by such e-commerce operator or courier agency.

(8) The information furnished in Part A of FORM GST EWB-01 shall be made available to the registered supplier on the common portal who may utilize the same for furnishing the details in FORM GSTR-1:

Provided that when the information has been furnished by an unregistered supplier or an unregistered recipient in RM GST EWB-01, he shall be informed electronically, if the mobile number or the e-mail is available.

(9) Where an e-way bill has been generated under this rule, but goods are either not transported or are not transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the common portal within twenty four hours of generation of the e-way bill:

Provided that an e-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of rule 138B:

Provided further that the unique number generated under sub-rule (1) shall be valid for a period of fifteen days for updation of Part B of FORM GST EWB-01.

Notification on Companies (Accounts) Amendment Rules, 2018

MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION

New Delhi, the 27 February, 2018

G.S.R. (E).—In exercise of the powers conferred by sub-sections (1) and (3) of section 128, sub section (3) of section 129, section 133, section 134, sub section (1) of 136 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Accounts) Rules, 2014, namely:-

1. (1) These rules may be called the Companies (Accounts) Amendment Rules, 2018.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Companies (Accounts) Rules, 2014 (hereinafter referred to as the principal rules), in rule 10, the following proviso shall be inserted, namely:-

“Provided that the Companies which are required to comply with Companies (Indian Accounting Standards) Rules, 2015 shall forward their statement in Form AOC-3A.”.

3. In the principal rules, in the Annexure, after Form AOC-3, the following Form shall be inserted, namely:-

“FORM AOC-3A

Statement containing salient features of the financial statements

(Division II- Schedule III to the Companies Act, 2013)

(Pursuant to first proviso to sub-section (1) of section 136 of the Act and proviso to rule 10 of the Companies (Accounts) Rules, 2014)

Form of Abridged Financial Statements

Part I

Part II

Abridged Statement of Profit and Loss for the period ended ……

Part III

Abridged Cash Flow Statement

Notes to the Abridged Financial Statements

1. Complete Balance Sheet, Statement of Changes in Equity, Statement of Profit and Loss Statement of Cash Flows (wherever applicable) and other statements and notes thereto prepared as per the requirements of Division II to the Schedule III to the Act are available at the Company’s website at link Copy of financial statement is also available for inspection at the registered office of the company during working hours for a period of 21 days before the date of AGM.

2. The amounts to be shown here should be the same as shown in the corresponding aggregated heads in the financial statements as per Schedule III.

3. Amount, if material, by which any item shown in the financial statements are affected by any change in the accounting policy, should be disclosed separately.

4. The amount of contingent liabilities and that of commitments (to the extent not provided for) should be disclosed separately, as per Division II, Schedule III.

5. All notes forming part of the financial statements as per Schedule III to which specific attention has been drawn by the auditors or which form a subject matter of qualification by the auditor should be reproduced.

6. Any item which constitutes 20% or more of the total income or expenditure (including provisions) should be shown separately.

7. Notes shall include the notes, if any, contained in the financial statements pertaining to the following:

a Period and amount of defaults on the balance sheet date in repayment of borrowings (other than Trade Payables) and interest thereon.

b Business combination like Amalgamations, acquisitions, restructurings, and demergers during the Reporting period.

c Material events affecting the going concern assumption,

d Investigation and inspection conducted or ordered under the provisions of Companies Act, 2013.

e Non-compliance with any law during the Reporting period and the penalties imposed/compounding fees paid.

f Any other note considered significant by the management.

8. Disclosure of Related Party Transaction shall be made in terms of the requirements of Ind AS- 24.

9. Details of cash and cash equivalents shall be disclosed as follows:

a Balances with banks;

b Cheques, drafts on hand;

 c Cash in hand;

d Others( specify nature)

(Separate disclosure should be made for cash and cash equivalents earmarked for specific purposes).

10. Segment Reporting shall be in the same format/details as reported in audited financial statements.

The above stated salient features of the abridged financial statements should be authenticated in the same manner as the main financial statements.

DIRECTOR’S REPORT

Salient features of Director’s Report shall be disclosed.

Salient features shall include the following.

a) State of affairs of the company.

b) Details of Dividend declared.

c) Details of frauds, if any, reported.

d) Details of auditor’s qualifications and reply thereon.

e) Highlights of the company’s performances. These highlights shall be separately given for the companies material subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS

Where a company is required to prepare Consolidated Financial Statements, i.e. consolidated balance sheet and consolidated statement of profit and loss, the company shall mutatis mutandis follow the requirements of Division II to the Schedule III of the Act, as applicable to a company in the preparation of balance sheet and statement of profit and loss. In addition, the consolidated financial statements shall disclose the information as per the requirements specified in the applicable Indian Accounting Standards (Ind AS) including the items specified at Serial numbers (1) and (2) under the heading “general instructions for the preparation of consolidated financial statements” contained in the said Schedule. The company should follow the above requirements mutatis mutandis while presenting the abridged consolidated financial statements.

AUDITOR’S REPORT

The Auditor’s report on unabridged financial statements shall also be attached along with this Abridged financial statements.

Note : To be certified in the same manner in which the Balance Sheet is to be certified.”.

[F. No. 1/19/2013-CL-V-Part]

K.V.R. Murty, Joint Secretary