How to tax the profit from Bitcoin investment?

The Income Tax Appellate Tribunal in jodhpur has issued an important order on how to tax the profit made from investing in Bitcoin. A former Infosys employee invested Rs 5 lakh in Bitcoin in 2015. Later, he sold it for Rs 6.69 crore. The profit he got from this sale was taxed at a higher rate by the Income Tax Department. But he paid only Rs 33 lakh as income tax on this sale. The Income Tax Department, which objected to this, has said that he should pay additional tax. Following this, the person filed a case in the Income Tax Appellate Tribunal in Jodhpur. In that case, the Income Tax Appellate Tribunal has ruled that the cryptocurrency sold by this person through the cryptocurrency known as Bitcoin is his capital asset. Apart from that, the tribunal has pointed out in its judgment that he made this investment from the salary he received from Infosys. The tribunal has clarified that under Section 54 of the Powered By Income Tax Act, a person needs to pay only 20% of the profit made from the sale as tax and can get a tax exemption of up to Rs 4.95 crore.
 Also, this person is not involved in the activity of buying and selling cryptocurrency continuously. It has been stated that his intention is to buy it as an investment and hold it for a long time and then sell it. This person invested in cryptocurrency in 2015-16 and sold it in the financial year 2020-21. His intention is to hold it for a long time. In that case, it has been said that it should be considered a capital asset. The person used the profit he got to buy a house again. That is, he reinvested that profit, it is stated in the judgment. The judgment has pointed out that the profit obtained by selling investments made in cryptocurrencies like Bitcoin should be considered as capital gain and not as income from other sources.
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Sowmiya Sriram

22/12/2024 11:58 AM