How do we pay taxes on BTC and how do we show it in our accounts?
-snip-Yes. Age really doesn't matter in this case.
Even in the case of minors, income is clubbed with that of the guardian and income tax has to be paid.
Then why he/she will pay the taxes if not even withdrawing the bitcoins to bank account ?
I will be waiting for the answer.
Thanks
You do not have to. If you're only having BTC online and in the form of fiat currency, there arises no question of tax.
Even if you are converting it into INR through an exchange you only need to pay service taxes and other state cess and there is no need to pay capital gain tax. This much I have had it clarified from my CA as well as an expert senior lawyer from Mumbai who is well versed in financial laws. Both of them were crystal on the fact that as long as there is no regulation in place treating bitcoin as an asset, paying capital gains is not necessary and waste of ones money.
All of this changes if and when bitcoin becomes a regulated asset, you would have to maintain strict books regarding buying and selling coins to show capital gains and also pay taxes on the arbitrage.
thanks, this is what I am looking for...
service tax on total fiat currency?
And % of service tax