Re: Solutions on How to file Tax returns on Bitcoin Income
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For Bounty Hunters and Signature Campaigner: If you have earned any income from such sources and redeemed it on an Indian exchange. Its better if you show yourself as a Digital Marketing Agency and file your return under Profits and gains from Business. In this way you will be able to take advantage of "Presumptive Income Scheme" in which you can declare your total earnings and even subtract some expenses such as Internet Cost, Electricity cost etc. better ask your CA regarding it. So if you have earned received for eg. ₹200,000 in form of Receipts from signature campaigns you can deduct some expenses and file a return under 44ADA.
Section 44ADA of Indian Income tax act says that certain professionals as mentioned under section 44AA(1) will only have the benefit of declaring their income under section 44ADA.
Absolutely right that this benefit is only available to people notified U/S 44AA(1)
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Now section 44AA(1) says,
(1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette' shall keep and maintain such books.
Yes this is what is written under 44AA(1) which says any other profession as notified by board in official gazette which has notified Information Technology Services. Signature campaign and digital marketing( The broad domain of bounty hunters) falls under this category.(1) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette' shall keep and maintain such books.
Now your interpretation of 44ADA is horribly wrong. It only takes out the notified services from 44AA(1) not the clause of maintaining books of account, it contradictaly states that
Section 44ADA(4) Notwithstanding anything contained in the foregoing provisions of this section, an assessee who claims that his profits and gains from the profession are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (1) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.
In layman terms this means that one who is not obeying 44ADA has to mantain books of accounts as prescribed by you here
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Cash book;
Journal;
Ledger;
Carbon copies of the bills and receipts issued by the person in relation to sums exceeding Rs.25;
Original bills and receipts issued to the person in respect of the expenditure incurred.
Journal;
Ledger;
Carbon copies of the bills and receipts issued by the person in relation to sums exceeding Rs.25;
Original bills and receipts issued to the person in respect of the expenditure incurred.
And if we say that even people opting for 44ADA and 44AB have to maintain books of accounts then the whole presumptive income scheme becomes a joke.
Source: http://www.icnl.org/research/library/files/India/IndiaIncomeTax1961.pdf
Alternatively showing it under other income sources may make such income more prone to scrutiny by Income Tax due to unclear disclosure while no one doubts on a digital marketing business that easily.