Crypto p2p tax ..how to show..coin bought in binance then transferred to other platforms for mining. Mining rewards again transferred to another platform for more mining etc. And rewards coin is not converted back to inr. Eventually it will be. So total investment say 50k converted using binance , total money came back in inr is just 5k. Rest of money in different coin form in different platforms ( not in binance). How to show all this in tax .

Ans: If Virtual Digital Assets (like Cryptocurrencies) are not held as Investment, it will be liable to tax as Income from Business and Profession. Further, in the absence of any specific exemption, in my view, tax audit provisions are likely to apply for turnover above Rs 10 crore, subject to fulfilment of other conditions.

GST on Cryptocurrencies is at proposed stage and not yet implemented.

Ans: In case of crypto to cryto transaction, TDS is applicable even at the time of acquisition and same can me claimed in the year of deduction. If the crypto are acquired by paying amount, no TDS will be applicable.

Thus, when you are buying one type of crypto by transferring another, tax is levied even on transfer of original crypto.

Ans: Your inquiry reflects a responsible approach to understanding the tax implications of investing in cryptocurrencies. The 1% TDS (Tax Deducted at Source) levied by the crypto exchange is an advance tax payment, akin to a prepayment of your tax liability on the profit from cryptocurrency transactions.

When you sell your crypto tokens in subsequent financial years, the 1% TDS already deducted will be adjusted against your final tax liability. Therefore, you won't have to pay the 1% TDS again when you sell your cryptos.

However, it's important to note that the profit from cryptocurrency transactions will be subject to a 30% tax (plus surcharge) when you sell them in the future. This tax will be calculated on the gains made from your crypto investments, after deducting any allowable expenses or losses.

To ensure compliance with tax regulations and maximize your tax efficiency, consider consulting with a tax advisor or a Certified Financial Planner. They can provide personalized guidance based on your financial circumstances and help you navigate the complexities of cryptocurrency taxation.

Ans: 01. Crypto Currency or Virtual Digital Assets are taxed @ 30% + SC + HEC.
02. Tax Rate remains the same whether it is reported under any head of Income, i.e., Capital Gains or Business Income or Other Income.
03. Ant loss under this head cnanot be set-off against under other heads of Income or even other transactions, under the same head of Income.
04. If reported under Capital Gains, benefit of Indexation is not allowed.
05. Except Cost of Purchase, no other expenditure is allowed as deduction, like Cost of Improvement or Transfer expenses etc.
Most welcome for any further clarifications. Thanks.

Ans: 01. Income Tax on Crypto Currencies is 30%. It needs to be declared in your ITR & tax paid before filing your ITR.
02. TDS is deductible @ 1% of Sale proceeds, which are being transferred to your account.
Most welcome for any further clarifications. Thanks.