Hi,

I want to purchase BTC on localbitcoin website using IMPS transfer. If I purchase btc using IMPS then IMPS transaction will appear in my bank account transaction history. As I maintain account books for income tax purpose and I can not show it as a btc transaction, what should I write in purpose of this transaction?

I don't want to show it as business expense or transfer to friend and family. What are other common reasons that I can use to show IMPS transfer in my account books so that it doesn't capture attention if it is ever checked by Income tax department in future.

Is there anyone who has purchased BTC using IMPS transfer. How do you report / show that transaction in your income tax / account books.  (I see that there are too many people who are using IMPS transactions for BTC sell/purchase so I am sure some of them are definitely showing those transactions in their account books/income tax.)

Also, if I report a reason and the seller reports a different reason for that transaction then a mismatch will occur. Will it capture attention? Do we both need to report SAME reason for that transaction? For example: If btc seller has a furniture shop and he reports that IMPS transaction as a payment for selling furniture to someone while I report that transaction as an education fees paid to someone for teaching me technical stuff, will it create a problem in future? OR it is fine if we both report our own different reasons instead of giving same reason.

Please reply.

Thanks.