The Indian tax bill says that I owe 30% taxes on all profits made in crypto. So I am assuming that if I have a business that's making sales in cryptos I will be liable to pay 30% on all the income that I have earned from it.
But what if I decide to reinvest all of this income back into growing the business? Since the business is a DAO I can't register it as a company so how will the court draw this line between me as an employee in the DAO and me as an investors?
The government cannot force me to sell my cryptos to pay the 30% tax can they?
What if I say that whatever income I have received I am currently hodling it, will they still force me to liquidate?
Hi,
You will have to pay tax only when you earn an income from a transaction, transfer or exchange or crypto or other virtual digital assets. No tax is to be paid for holding crypto. It should be noted that in case any taxpayer has earned any income from the transfer of a virtual digital asset, the said income shall be subject to tax at the rate of 30%.
If the crypto currency is held for more than 36 months, then your gain will be classified as a long-term capital gains tax and will be subject to tax at 20%, plus applicable surcharge and cess but post indexation. This means that your tax amount will be calculated after adjusting for inflation index. Since the purchase price is adjusted for inflation, the capital gain gets reduced.
If the transfers are large and frequent, it could be held that the taxpayer Is trading in cryptocurrency and so the income from sale would be taxable as business income. If reported as business income, the GST on them will also be examined.
I hope this answers your question.
Have a good day!
