Quote from: protrader786 on September 11, 2020, 10:44:19 PM

Hello,

After reading this I had a doubt, we pay taxes, I agree. But only for transactions done in fiat right ?

Everything we do with our bank account is monitored by the RBI and we are questionable and taxable for the same. They are also freezing our bank accounts for being involved in crypto trading. How do they expect us to give them data of something like this when they themselves don't support it.

Also, am I taxable if I just store my BTC as it is ? Like, I sold a service, got paid, I never cashed it out : I just want it to remain as it is in my wallet.

The question you have is actually genuine and any rational person would have this question. But this isn't how law works. Let me explain you how.

In the recent case of Mobile Association vs RBI(SC) in which crypto was unbanned from banks. Supreme court held that as per the RBI act powers of RBI are not just limited to fiat currency i.e. Rupee they are the controllers of all types of money as well as foreign currency. And foreign currency as defined in FEMA,1999 is any currency other than Indian currency and Supreme court held that Bitcoin is a virtual currency technically making it a foreign currency or atleast a foreign asset. In either case RBI does have jurisdiction over it. It's the law of the land.

About taxes I already said that there is now law governing taxes. Yet taxes generally include even those incomes whose benefits have not been received in fiat. Like in Income tax definition of Profits and gains from business includes Section 28 which says:

Quote

(iv) the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession;

Therefore even benefits in non monetory terms are taxed you can't get away from them. Which means when you receive cryptocurrencies benefits are said to be accrued. Coming to information Income tax agencies have power of civil court so you cannot opt to lie in front of an IT officer he can call for any documents he may deem fit. Moreover even your PAN is generally given to Indian exchanges so technically a trail can be established easily.

So as per law legally you have to declare taxes on your incomes even if not converted into fiat.

However there can be all sorts of debate on this point in the court. My view is that it would be taxed so better paying taxes in advance than being sorry later. Rest it's upto you.

Quote from: akram143 on September 12, 2020, 08:42:09 AM

Quote from: protrader786 on September 11, 2020, 10:44:19 PM

Hello,

After reading this I had a doubt, we pay taxes, I agree. But only for transactions done in fiat right ?

Everything we do with our bank account is monitored by the RBI and we are questionable and taxable for the same. They are also freezing our bank accounts for being involved in crypto trading. How do they expect us to give them data of something like this when they themselves don't support it.

Also, am I taxable if I just store my BTC as it is ? Like, I sold a service, got paid, I never cashed it out : I just want it to remain as it is in my wallet.

You are not paying taxes for your transactions, you are just need to pay taxes for your earnings basically the income.And taxes are not monitored by RBI so your tax reports will not be going to the bank related offices so you no need to worry about it.

As long as you are not converting your bitcoins into fiat then there is no need of reporting it to tax.

I don't think this exactly is the case. With all sorts of Adhaar authentication today. Central agencies have become even more centralized but I don't think RBI is going to freeze accounts anymore.