is it legal to accept bitcoins in india

[sahamo123]

hi, i would like to know is it leagal to accept bitcoins as a mode of payment in india? if so are there any legal statement or document supporting it?

Here is the Answer for your question: http://cis-india.org/internet-governance/bitcoin-legal-regulation-india

[stellar69]

Well i accept bitcoins for many freelancing jobs. Why would it be illegal?

[adv.kanishk]

Well i accept bitcoins for many freelancing jobs. Why would it be illegal?

Accepting bitcoins for freelancer job is not illegal, but the question how you are treating them in your tax return and want kind of documentation trail you are keeping in order to support with department queries is what matters.

Buying and selling of bitcoin is not illegal but only if buying/selling is done through reported money. One might get in problem trading in bitcoin through cash, if one day the department think of initiating action against bitcoin people. Certain aspects are to be taken into consideration.

Not to scare anyone but as a member I wanna caution people dealing in cash for buying/selling of bitcoins. Also, the one who are providing services or selling goods needs to consider certain parameters which falls upon the legal line of law.

Regards
--
Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com
+919971666252

[sambiohazard]

Here are some of my thoughts on this topic. I am not an expert by any stretch of imagination

http://ramblingsmemind.blogspot.in/2014/09/bitcoin-currency-or-commodity-and-how.html

[polynesia]

Not to scare anyone but as a member I wanna caution people dealing in cash for buying/selling of bitcoins. Also, the one who are providing services or selling goods needs to consider certain parameters which falls upon the legal line of law.

One benchmark you could always use for tax aspects is - how would it work if I replace bitcoin with gold in the question.
Is it legal to buy gold with cash? - The answer is yes,

[polynesia]

On a separate note, have you considered using the signature feature of this forum, Kanishk?
It could be useful to you. In case you change your phone number or product expertise, your old posts would still direct clients to the correct number, if you just update your signature.

[arvindr]

Well i accept bitcoins for many freelancing jobs. Why would it be illegal?

Accepting bitcoins for freelancer job is not illegal, but the question how you are treating them in your tax return and want kind of documentation trail you are keeping in order to support with department queries is what matters.

I am not sure if many people actually go about filing those incomes in their tax returns.
As its hard to know which bitcoin address is whose, it would also be hard for the government to find out unless you trade them for Fiat.

[polynesia]

Well i accept bitcoins for many freelancing jobs. Why would it be illegal?

Accepting bitcoins for freelancer job is not illegal, but the question how you are treating them in your tax return and want kind of documentation trail you are keeping in order to support with department queries is what matters.

I am not sure if many people actually go about filing those incomes in their tax returns.
As its hard to know which bitcoin address is whose, it would also be hard for the government to find out unless you trade them for Fiat.

Hypothetical case - Bitcoin goes to the moon and you trade some of them for fiat. You may want documentary proof to minimize your income tax payout.

[suman66]

so its safe to keep it as btc rather than converting to inr right?

Convert what you need for taxes and keep the rest.

how much tax need to pay ?

[Troonetpt]

Sure, you can use bitcoin freely

[sgk]

Well i accept bitcoins for many freelancing jobs. Why would it be illegal?

Accepting bitcoins for freelancer job is not illegal, but the question how you are treating them in your tax return and want kind of documentation trail you are keeping in order to support with department queries is what matters.

I am not sure if many people actually go about filing those incomes in their tax returns.
As its hard to know which bitcoin address is whose, it would also be hard for the government to find out unless you trade them for Fiat.

Correct. It is more of a moral issue right now. If you want to report all your BTC income as regular income, you might want to pay tax on it.

But since RBI has no such guideline (how to calculate tax on Bitcoin income), you might just want to report only the amount you convert to fiat.

Having that said, it would be nice to have some guidelines from RBI or income tax department on how taxable BTC is and how much tax to pay.

[polynesia]

Correct. It is more of a moral issue right now. If you want to report all your BTC income as regular income, you might want to pay tax on it.

But since RBI has no such guideline (how to calculate tax on Bitcoin income), you might just want to report only the amount you convert to fiat.

Having that said, it would be nice to have some guidelines from RBI or income tax department on how taxable BTC is and how much tax to pay.

I guess if you want to be totally accurate/honest, you have to calculate your BTC income based on the exchange rate on the day you receive BTCs.
You would then have capital gains/losses when you actually convert to fiat.

[Fernandez]

Since we are supposed to pay tax when price rises and we make a profit, wonder if I can write to the IT department asking for a donation since I lost due to the price crash

[polynesia]

Since we are supposed to pay tax when price rises and we make a profit, wonder if I can write to the IT department asking for a donation since I lost due to the price crash

If you have a cash loss, you can claim a capital loss and offset it against capital gains.

[sambiohazard]

How do I account for mining, faucets & tips from others? Also if i make any gains on altcoins how to represent that?

Is there any limit on capital gains tax? like you dont owe income tax for income upto INR 2lakh.

[polynesia]

How do I account for mining, faucets & tips from others?

Technically, they would be income from other sources.

Also if i make any gains on altcoins how to represent that?

By gains, do you mean profit on conversion to ruppees? If yes, capital gains tax would be applicable.

Is there any limit on capital gains tax? like you dont owe income tax for income upto INR 2lakh.

There is no limit on capital gains. Of course, you can still set off against capital losses.

[baristor]

as far as I know it is legal but can be taxed if u are earning income via bitcoin.  the govnt so far hasnt made a firm stand on bitcoin , >.<

[Benson Samuel]

as far as I know it is legal but can be taxed if u are earning income via bitcoin.  the govnt so far hasnt made a firm stand on bitcoin , >.<

How can I pay my taxes in Bitcoin?
Am sure that the Indian Govt has not yet asked or mentioned anything about this as yet.
In fact, if they do, it would legitimize Bitcoin is a big way in India!

[polynesia]

as far as I know it is legal but can be taxed if u are earning income via bitcoin.  the govnt so far hasnt made a firm stand on bitcoin , >.<

How can I pay my taxes in Bitcoin?
Am sure that the Indian Govt has not yet asked or mentioned anything about this as yet.
In fact, if they do, it would legitimize Bitcoin is a big way in India!

I doubt if this would ever happen.
Even though the government recognizes the USDs and EURs of the world, taxes still have to be paid in INR.
So even if BTC gains legitimacy and is recognized, the government would still want taxes to be paid in INR.

[Benson Samuel]

as far as I know it is legal but can be taxed if u are earning income via bitcoin.  the govnt so far hasnt made a firm stand on bitcoin , >.<

How can I pay my taxes in Bitcoin?
Am sure that the Indian Govt has not yet asked or mentioned anything about this as yet.
In fact, if they do, it would legitimize Bitcoin is a big way in India!

I doubt if this would ever happen.
Even though the government recognizes the USDs and EURs of the world, taxes still have to be paid in INR.
So even if BTC gains legitimacy and is recognized, the government would still want taxes to be paid in INR.

I think the ambiguity here is more for people who do not convert their BTC. What needs to be paid in that event?