Quote from: webtricks on Today at 04:07:23 PM

Quote from: Mistafreeze on Today at 08:55:26 AM

Quote from: webtricks on November 15, 2020, 11:04:52 AM

~snip~

What about income coming from selling BTC/alts earned through airdrops and bounty campaigns?

All incomes are taxable so you have to pay tax on airdrops and bounty campaigns earnings too. Most of the members who earn through these mediums are also involved in some sort of campaigning for projects like signature or social media campaigning. I have talked to several CAs in my fraternity about this and it is general practice that they treat clients' income from these sort as 'Professional Income'. Although, section 44ADA which is meant for professionals doesn't specifically consider this work as profession but the section mentions this line:

"Other professions mentioned by the Central Board of Direct Taxes"

And CBDT mentioned 'Advertising' (code: 16006) as one of the professional income. Although, CBDT doesn't specifically explained which type of advertising but it is safe to assume that anything you earn by promoting crypto project is sort of an advertising and you are kind of professional who possess special skills for which projects pay you. So, in my views 44ADA is the best way to report such earnings. You should club your bounty earnings alongside all other forum and crypto earnings (except trading profits) and report it as professional income. Check out my this thread to learn how professional income is treated: https://bitcointalk.org/index.php?topic=5206607.0

Alternatively, if your amount is not much (less than Rs. 50,000), you can report it as income from other sources (freelancing income) like @pawanjain said.

Thank you for detailed explanation. Yes I know income frome bounty and airdrops are also taxable but my concerned is about source of this income.
What can we describe as source of this income since we don't get any invoices etc.
It may be assumed that we are getting it from some illegal source or we are involved in money laundering etc. How can we safeguard ourselves from such possibilities?