You want to buy the bitcoin and hope your wallet grows over on its own. Let us say, if you have bought $10,000 of BTC and sold this 3 months later, you will get more than doubled the holdings, you exchange BTC to INR. While it comes about buying bitcoin, remember that the past performance isn’t always the right indicator of the future performance, or with the cryptocurrencies in the infancy and large dips in the value do happen.
Check Out Capital Gains Tax
Suppose you are the investor, you need to pay the capital gains tax. The capital gains are short-term or it can be long-term. There’s not any provision for the bitcoins or other cryptocurrencies in Income Tax Act. And in absence of such provision, we think general provision may apply. Thus, if you are holding bitcoins for below 36 months, the short-term gains might be applicable. Suppose you hold the bitcoins for over 36 months, then long-term gains tax is applicable. The short-term gains are clubbed with the salary income or taxed at the slab rate. For LTCG tax, you need to pay around 20% tax, and with benefit of indexation.
Filing the tax returns
Till now, you must have got the Form 16 from employer. Now it is the right time to file the income tax returns. Suppose you have got any gains from selling the bitcoins, you need to pick right ITR form. You need to know ITR1 isn’t the right form for you.