The Central Government of India plans on introducing Banning of Cryptocurrencies and Regulation of Official Digital Currency Bill 2021 during the second week of March, 2021.
Before we get to the point, we tried to educate you about Income Tax General Treatment about income tax on earnings from digital decentralized currencies. In case you are searching for a new crypto asset to invest in, you must seek knowledge about income tax on your earnings from cryptocurrency related activities.
Cryptocurrency Related Activities:
Coming to the point, experts could not find any tax related guidance related to these crypto activities. Some of the tax specialists consider mining as a Self-acquired Capital Asset. According to them, it could be considered taxable as a “Capital Gain” under section 45 of the Income Tax Act 1961.
What Is Capital Gains?
This is another key thing you must know about before/while searching for a new crypto asset to invest in. Coming to the point, according to one of the reputed Indian accounting firms, income generated through cryptocurrency trading does not fall in the category of normal income.
It is falls in the category of capital gains. The concept of capital gains is applied to amount of profit generated through the sales of moveable and immoveable asset.
Assets generated via mining fall in the category of Self-generated Capital Assets.