Crypto Tax Support Is Coming Slowly to India

While the focus may be on the U.S. of late, cryptocurrency tax issues are becoming a global problem.

Has responded by sending tax notices to crypto traders and investors after a survey found $3.5 billion in transactions may have been performed by citizens over the past 17 months.

Recently introduced a crypto tax advisory service in partnership with bitcoin wallet Zebpay, a move that echoes those by other global startups like Coinbase.

"There is lack of clarity and anxiety, and several views are floating about how gains from must be reported in tax returns."

Plus, Cleartax has launched certified accountant-assisted tax filing services for investors, helping them report their short- and long-term capital gains from the sale of cryptocurrency.

The nation's central bank, the Reserve Bank of India, has been repeatedly issuing warnings to users, holders and traders of cryptocurrencies, stating that it has not given any license to any entity or company to operate or deal with bitcoin or any cryptocurrency, potentially putting a damper on tax disclosures.

"[With this], the possibility of any formal details on how to tax and report these remains low," Archit Gupta, CEO of Cleartax, told CoinDesk.

Bitcoin exchanges in India including Unocoin, Zebpay and CoinSecure are seeking clarifications over tax liabilities for their operations.

Still, Gupta said, even with "No clear directive" from the country's income tax department on how cryptocurrency holdings must be reported, users, at least, should pursue paying some form of tax on them.

In the absence of such rules, he said, "It would be wiser to report these as 'income from other sources' and pay a 30 percent tax on gains from them as opposed to reporting them as capital gains, which would mean these are capital assets."