The largest tax filing platform in India, Cleartax, together with Zebpay, one of the leading Indian cryptocurrency exchanges, is uniting efforts to help Indians with their crypto taxes. The partnership aims to educate bitcoin investors and traders about the current tax laws and how they apply to reporting cryptocurrency incomes and profits.
Helping Taxpayers Understand the Law
Indian regulators are still struggling to find the best approach to cryptocurrencies like bitcoin. Statements by officials that new rules will be implemented soon have not been followed by actions. On the contrary, attempts to impose oversight on the crypto ecosphere have led to conclusions that this isn’t going to be an easy task. According to media reports from last month, new regulations were expected by the end of March.
Despite failing to introduce comprehensive regulations, authorities in India are eager to tap into crypto earnings, like many other governments around world. Last month the Income Tax Department issued notices to thousands of cryptocurrency investors, as news.Bitcoin.com reported. Questions followed. If cryptocurrencies are neither legalized nor regulated, how are taxpayers expected to report their crypto incomes and profits?
A new initiative called the Cryptocurrency Advisory Plan will support Indian bitcoin traders and investors in this year’s tax campaign, according to the Business Standard. Joining hands in the effort are the largest tax filing platform in the country, Cleartax, and one of India’s biggest bitcoin exchanges and wallet providers, Zebpay. The partnership is intended to help taxpayers understand and abide by the law regarding taxation of cryptocurrency transactions.
Clearing the Air Around Cryptocurrencies
Cleartax claims it has the technological and tax expertise “to help people understand how bitcoin works”. In addition to the advisory plan, the platform has launched crypto tax filing services for investors who have earned capital gains from the sale of cryptocurrencies. “With our expert-assisted plans, created in partnership with Zebpay, we want to clear the air around digital currencies. We’ve always aimed to simplify taxes for Indians. This latest offering is another step in the same direction,” said CEO and founder Archit Gupta.
Nischint Sanghavi, head of exchange at Zebpay, added that his company has been looking for a “like-minded partner” to address queries related to cryptocurrency taxation. Sanghavi believes the partnership with Cleartax will make tax planning simpler for Zebpay’s customers.
In February, India’s Income Tax Department sent tax notices to about 100,000 cryptocurrency investors, after monitoring the operations of leading trading platforms in the country. Suspecting dubious transactions, authorities investigated some of the largest cryptocurrency exchanges, and banks have suspended many of their accounts. The institutional pressure and the bank clampdown have led to significant drop in trading volumes on local platforms. Some of them have reported a 10-fold decrease in the last two months.
Cryptocurrencies are not considered legal tender in India and authorities in Delhi have issued multiple warnings against investing in bitcoin. At the same time, the largest Indian commercial banks have limited severely the operations of local crypto exchanges and individual traders, even before any legislation mandating such policies is adopted.
Do you know the requirements of tax laws in your country in regards to reporting crypto incomes and gains? Tell us in the comments section below.
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Author: Lubomir Tassev